Clear The Air News Tobacco Blog Rotating Header Image

Australia

$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.”

Cigarettes and plain packaging – new dataset says it works

It seems our carrying in good faith last week the data-selective assertions of Canadian journalist and development officer of ‘Students for Liberty,’ Yael Ossowski, that plain cigarette packaging does not work as a harm reduction tool, is way short of the full story. So short as to be untrue, says Yussuf Saloojee, Executive Director of SA’s National Council Against Smoking in his response below. He claims Ossowski is just plain wrong – and provides a wider data-set, making a strong case for plain packaging. Saloojee picks out a more convincing Australian data-set than the one Ossowski used. It’s one of those fields where trillions of dollars are at stake and smoke and mirrors are the order of the day. As I found out when once I tried to sift through the mountains of opposing data submitted by the protagonists in the e-cigarettes debate where the latest arena of battle is harm-reduction. Some international scientific heavyweights stack up on the side of e-cigarettes, like SA-born pioneering long distance swimmer and executive director of the Vitality Institute, Dr Derek Yach. Harm-reduction and preventative wellness medicine and exercise lie at the core of Discovery Health’s business model, hence the choice of former WHO executive Yach to head up their Institute. Yach was behind much of the ANC’s globally-admired, progressive smoking policies and evolving legislation. But he parts company with Saloojee on e-cigarettes and harm reduction, saying it’s the smoke that kills, not the nicotine (which e-cigs deliver, without the more harmful smoke). Here are the results of Saloojee’s foray into the scientific wizardry of Oz where this dataset seems to blow away some of the red outback dust that Ossowski stirred up. – Chris Bateman

http://www.biznews.com/health/2017/03/06/cigarettes-plain-packaging/

By Yussuf Saloojee*

In Australia, the attractive colours and logos that increase the appeal of the cigarette pack, especially to children, have been replaced by honest, truthful information on the dangers of smoking. Cigarettes are now sold in plain packaging – that is, in dark brown packets with pictures of sick smokers on it.

And plain packaging works. Smoking rates have dropped to record lows since its introduction in late 2012.

The latest data from the Australian Secondary Student’s Alcohol and Drug survey show that between 2011 and 2014 the number of 12 to 17 year-old students who have never smoked increased from 77.4% to 80.5%. Adult smoking rates have also fallen. Among Australians aged 14 or older the number of people who smoke daily fell from 15.1% to 12.8% between 2010-13.

There are now 200,000 fewer smokers in this age group.

The tobacco industry knows that plain packaging lowers profits, so the industry and its cronies have resorted to falsely claiming that plain packaging is ineffective.

Further, the major cigarette companies are rapidly expanding into the e-cigarette business and would obviously benefit from growth in this market. So, to kill two birds with one stone, the industry proposes that plain packaging laws should be dropped and that e-cigarettes (or ‘vaping’) be promoted to reduce smoking. A win-win for the industry, as a measure that reduces sales would be replaced with one that increases profits.

The problem with this suggestion is that the majority of e-cigarette users still continue to smoke regular cigarettes and there is no health benefit if people both vapor and smoke. While the industry would profit from addiction by selling e-cigarettes alongside regular cigarettes, there would be no public health gain.

The decision to implement plain packaging in Australia was based upon extensive scientific evidence and the law has been upheld by the courts. Numerous other countries, including Ireland, the United Kingdom, France, Hungary, New Zealand, Norway, Chile and Singapore, are persuaded by this evidence and have now adopted or are considering adopting similar measures.

South Africa would be well advised to also do so, as plain packaging will help reduce the over 40,000 deaths caused by cigarettes each year.

Yussuf Saloojee, Exco Director of the SA National Council Against Smoking

Just one $2000 fine issued since tough new plain packaging laws introduced

Big tobacco has exploited a loophole in Australia’s world-first plain-packaging laws, which allowed smokers to ditch the now famous drab packaging.

http://www.smh.com.au/national/health/just-one-2000-fine-issued-since-tough-new-plain-packaging-laws-introduced-20170301-guoiu4.html

The Department of Health has received 1054 individual complaints involving 746 cases since the December 2012 legislation banning tobacco companies from putting their products in anything other than dark olive brown packaging that feature graphic health warnings.

Of those cases, 459 were cleared and 135 warning letters were issued, according to figures revealed in a Senate estimates hearing on Wednesday, with an ACT retailer receiving the only fine, paying $2040 for “non-compliant cigars”.

But the department could not say whether Imperial Tobacco, one of the world’s biggest tobacco companies, received a warning for producing what it described as a “fresher, premium product” for its Peter Stuyvesant brand which allowed customers to shed the government-mandated packaging and use a plain silver soft pack enclosed inside.

The Plain Packaging Act allows lining within the pack, but only foiled back paper, while also outlawing both inserts and onserts (a sticker that can go over existing packaging).

Departmental deputy secretary Wendy Southern told the hearing the Imperial insert, brought to the department’s attention by a media enquiry last year, was found to be an example “where clearly we believed it as circumventing the plain packaging legislation”, but there was some question over whether it constituted a breach.

“The department engaged with the manufacturer through correspondence and basically the company undertook to remove the product from the market,” she said, under questioning from Labor senator Murray Watt.

“So we have one of the biggest tobacco manufacturers in the world, quite deliberately circumventing these laws and nothing happens apart from an undertaking and that’s after several steps in the chain,” the Queensland senator asked.

“The undertaking is to remove it from the market, which is ultimately what we were seeking,” Dr Southern replied, adding that the way the legislation was crafted, there was a process of “escalation”.

The legislation sets out a maximum penalty of $36,000 for manufacturers who don’t comply.

A departmental spokesman told Fairfax Media the “vast majority” of tobacco manufacturers and retailers were obeying the legislation, but on the Imperial Tobacco matter there “were differing views on the compliance of the product with the legislation”.

“As a result of correspondence between the department and the company which did include warnings about the consequences of continued non-compliance, the company made a decision to withdraw the product from the market,” he said.

“The decision by the company to withdraw the product from the market, in this instance, avoided the potential for costly and protracted litigation with an uncertain outcome and achieved the compliance outcome sought by the department.”

He said the department received reports from Imperial on the withdrawal of the packs from sale.

Shadow health minister Catherine King said there was room to revisit the landmark legislation, which was created under the Rudd/Gillard governments, saying it was “critical” the laws were enforced.

“If the government believes the laws need strengthening to do this, then Labor will work with them as a priority. Or else they should explain why companies are being let off the hook,” she said.

The laws have seen early indications of success in other areas, with an Australian National University study finding calls to the quit hotlines increased by 78 per cent during the phase-in period, and sat above average for the next 10 months.

The department estimates 15,000 Australians die every year from smoking-related diseases and costs Australia more than $31 billion in social and economic costs.

Doctors Lobby Group Would Welcome Arthur Sinodinos as Health Minister

Download (PDF, 751KB)

The effect of pack warning labels on quitting

The effect of pack warning labels on quitting and related thoughts and behaviours in a national cohort of Aboriginal and Torres Strait Islander smokers

Anna Nicholson, GDipPH, BPhty(Hons) PhD Ron Borland, PhD Pele Bennet, BHSc Maureen Davey, MB BS FAFPHM Jasmine Sarin, BHSci(Indig Hlth) Anke Van der Sterren, MPH MA BA Matthew Stevens, PhD David Thomas, MB BS PhD FAFPHM

https://academic.oup.com/ntr/article-abstract/doi/10.1093/ntr/ntw396/2871245/The-effect-of-pack-warning-labels-on-quitting-and

Abstract

Introduction:

The high prevalence of smoking among Aboriginal and Torres Strait Islander people in Australia (39%) contributes substantially to health inequalities. This study assesses the impact of warning labels on quitting and related thoughts and behaviours for Aboriginal and Torres Strait Islander smokers.

Methods:

Participants were recruited from communities served by 34 Aboriginal Community Controlled Health Services and communities in the Torres Strait, Australia, using quota sampling. A cohort of 642 daily/weekly smokers completed relevant questions at baseline (April 2012-October 2013) and follow up (August 2013-August 2014).

Results:

We considered three baseline predictor variables: noticing warning labels, forgoing cigarettes due to warning labels (‘forgoing’) and perceiving labels to be effective.

Forgoing increased significantly between surveys only for those first surveyed prior to the introduction of plain packs (19% vs. 34%), however there were no significant interactions between forgoing cigarettes and the introduction of new and enlarged graphic warning labels on plain packaging in any model. Forgoing cigarettes predicted attempting to quit (AOR: 1.45, 95% CI: 1.02-2.06) and, among those who did not want to quit at baseline, wanting to quit at follow-up (AOR: 3.19, 95% CI: 1.06-9.63).

Among those less worried about future health effects, all three variables predicted being very worried at follow-up. Often noticing warning labels predicted correct responses to questions about health effects that had featured on warning labels (AOR: 1.84, 95% CI: 1.20-2.82) but not for those not featured.

Conclusions:

Graphic warning labels appear to have a positive impact on the understanding, concerns and motivations of Aboriginal and Torres Strait Islander smokers and, through these, their quit attempts.

IMPLICATIONS

Graphic warning labels are likely to be effective for Aboriginal and Torres Strait Islander smokers as they are for the broader Australian population.

ACCC proposes to deny authorisation for tobacco companies

The Australian Competition and Consumer Commission has issued a draft determination proposing to deny authorisation to British American Tobacco, Imperial Tobacco, and Philip Morris (the tobacco companies) to jointly stop supply to retailers or wholesalers they believe are supplying illicit tobacco.

http://www.accc.gov.au/media-release/accc-proposes-to-deny-authorisation-for-tobacco-companies

The ACCC considers that having the three dominant tobacco companies working together, sharing information, and making decisions about whether or not to supply particular retailers raises competition concerns.

“The ACCC is concerned about the potential for the sharing of information broadly, and that, for example, the proposed arrangements could be used to selectively target retailers that stock competing brands. This could result in detriment to businesses that may be wrongly or mistakenly subject to a joint decision of the applicants to cease supply, without any opportunity for independent review of that decision,” ACCC Chairman Rod Sims said.

These three tobacco companies are the major suppliers of legal tobacco products in Australia. They have proposed the arrangements to reduce the supply of illicit tobacco in Australia.

“While we agree that reducing illicit tobacco sales is in the public interest, we are not satisfied these proposed arrangements would reduce trade in illicit tobacco sufficiently to offset the likely detriments,” Mr Sims said.

The ACCC expects to release its final decision in February 2017.

Further information about the application for authorisation is available on the ACCC Authorisations Register.

Sneaky tobacco companies use mystery shoppers to exploit ciggie loophole

TOBACCO companies are offering gift cards, flights and hotel stays to retailers to try and encourage them to push their brand onto customers.

http://www.adelaidenow.com.au/business/companies/sneaky-tobacco-companies-use-mystery-shoppers-to-exploit-ciggie-loophole/news-story/34d79da234e20b409cfa210739fb4e6d

TOBACCO companies are offering gift cards, flights and hotel stays to retailers to try and encourage them to push their brand onto customers.

With the battle for Australia’s $2.6 billion tobacco industry fiercer than ever, manufacturers are fighting to lure the nation’s dwindling number of smokers.

And while advertising bans and plain packaging laws have hit their profits, tobacco companies have found a sneaky legal loophole around them.

Marketing reps are sent to hotels, supermarkets, petrol stations, tobacconists and newsagents to train sales assistants in how to promote their brands to customers.

If they do as they are instructed, staff can win points and prizes such as gift cards, flights, hotel stays and vouchers for spa and beauty packages.

That’s where mystery shoppers come in: they keep tabs on staff, awarding points to those who recommend one cigarette brand over another.

It’s called “trade marketing”, and is one of the only legal ways cigarette makers can promote their wares under the highly restrictive regime that governs the sale and use of tobacco.

Health advocates say the scheme threatens to undermine the government’s plan to slash the rate of smoking to 10 per cent of the population by 2018.

But the loophole may soon be closed, with NSW Health Minister Jillian Skinner vowing to clamp down on the practice after being contacted by news.com.au.

‘WHAT WOULD YOU RECOMMEND?’

Mystery shoppers hired by Imperial Tobacco are sent to retailers with a very specific script.

“I normally smoke Winfield 30s but I am looking for an alternative, what would you recommend instead of Winfield 30s?” the shoppers are instructed to ask, in a job summary seen by news.com.au.

When asked how much they want to spend, the mystery shopper says “maybe something a little cheaper”.

If asked about their preferred cigarette’s strength, the shopper replies: “I usually smoke the blue ones.”

Then it’s over to the staff member who says the magic words and steers the “customer” towards John Player Special, a brand imported by Imperial. If the staff member does not mention any other brand, they score points towards the company’s incentive program.

At this point, the mystery shopper identifies him or herself and informs the staff member that the results will be tallied at head office and prizes awarded to those with the top scores.

mystery

The script given to mystery shoppers.

‘PUSHING THE ENVELOPE’

Scott Walsberger, the head of tobacco control and prevention at Cancer Council NSW, said mystery shopping was central to tobacco companies’ marketing strategies.

“Trade marketing as they call it is a significant part of their work,” Mr Walsberger said, adding that building relationships with retailers was one of the only legal methods to promote cigarettes after successive law reforms.

He said tobacco companies were desperate to make their products attractive to consumers after being banned from advertising in print and on television, and having the distinctive imagery and colour in their packaging replaced with drab, dark brown.

“Every time we’ve brought in legislation, you see the tobacco industry push the envelope, continually trying to make their product attractive and market them as much as possible,” he said.

“They’re always focused on selling more cigarettes, more people getting addicted and they go to all lengths to do that — so it’s not surprising that, as we tighten up regulations of how they market their products in some ways, that they’ve sought out the channels where they’re not regulated and exploit them to continue to promote their product.”

He called for new laws to better regulate how tobacco products are sold and marketed and made available through retail outlets, and rejected the argument that trade marketing only targeted customers who were already smokers.

“They say they’re not marketing to new customers, just getting people to switch brands or building brand loyalty; we know that’s not true,” Mr Walsberger said.

“Two out of every three smokers will die from their smoking habit. If that’s your consumer base, your target audience and you’re losing two out of every three of those, you need to be recruiting new smokers. So that has to be a key part of their marketing strategy.”

MINISTER PROMISES REFORM

Health Minister Jillian Skinner vowed to crack down on the mystery shopping scheme after being contacted by news.com.au.

“The NSW Government will seek to amend the Public Health (Tobacco) Act 2008 with the intention of tightening the law to prohibit this practice,” Ms Skinner said. “I am proud of this government’s record in reducing smoking in this state.”

A spokesman for Imperial Tobacco Australia said the company sold a legal product and defended its trade marketing practices.

“We work with a range of retail partners to have adult consumers of tobacco products choose our brands — including Peter Stuyvesant and JPS — over those of our competitors,” the spokesman said.

“The program in question sees shoppers specifically identifying themselves as adult consumers of tobacco products who are seeking a brand recommendation from a retailer.

“This clearly neither ‘circumvents legislation’ nor has any bearing on the choice of an adult to consume tobacco. It simply addresses which brand that adult consumer might choose.”

He said “anti-tobacco zealots” should look at the billion-dollar illicit tobacco trade and “focus their attention on serious problems rather than attempting to undermine legitimate and legal competition for no apparent purpose”.

WTO Delays Ruling In High-Stakes Tobacco Packaging Battle

The World Trade Organization will not issue a ruling on whether Australia’s “plain packaging” tobacco law usurps foreign companies’ intellectual property rights until May, according to WTO documents circulated Tuesday, delaying a decision that was slated to arrive by the end of 2016.

http://www.law360.com/articles/869566/wto-delays-ruling-in-high-stakes-tobacco-packaging-battle

A single WTO panel is weighing cases launched by the governments of Indonesia, Cuba, the Dominican Republic and Honduras asserting that Australian laws that ban all distinct branding from cigarette packages in favor of graphic warnings about the danger of the products. The case has teed up a high-stakes fight over the intersection of intellectual property rights and public health safeguards.

There is no precedent for such a law being challenged in Geneva, and the panel apparently needs more time to parse through the various legal issues at play.

“The panel wishes to advise that it now expects to issue its final report to the parties not before May 2017, in light of the complexity of the legal and factual issues that arise in this dispute,” the panel said in a statement circulated to the WTO.

Australia passed its packaging law in 2011 despite the protestations of numerous multinational corporations who viewed the measure as a direct threat to their use of trademarks and other branding mechanisms to promote their business. The four countries have said the law violates the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPS, as well as the Agreement on Technical Barriers to Trade and the General Agreement on Tariffs and Trade.

At every step of the way, Australia has claimed that it has the right to curtail businesses’ trademarks in the name of public health. For the first time in the WTO’s history, the panel will have to grapple with how the TRIPS Agreement comports with a country’s right to pursue policy objectives that it deems necessary to safeguard the public’s welfare.

The legal battles over the plain packaging law began almost as soon as it went into effect, beginning with a case filed by Philip Morris Asia Ltd. under the Hong Kong-Australia bilateral investment treaty.

In that case, the panel handed a win to Australia, albeit on jurisdictional grounds, meaning that the WTO’s decision will likely be the first ruling to address the issue on the merits. Even when the decision does come down, the case will be far from settled as all parties will be entitled to a round of appeals.

Nevertheless, the case will continue to be closely watched not only by the litigants and others in the tobacco industry, but also by those companies selling products that could e subject to similar public health rules, such as alcoholic beverages or fatty and sugary foods.

–Editing by Katherine Rautenberg.

Facebook could help lower Indigenous smoking rates, Northern Territory health researchers say

Indigenous people have the highest rates of smoking in the country, but researchers in the Top End believe Facebook could be the most effective way of helping them quit.

http://www.abc.net.au/news/2016-11-21/facebook-could-help-lower-indigenous-smoking-rates/8043694

Aboriginal people living in remote communities smoke at three times the rate of other Australians, according to research fellow Marita Hefler from the Menzies School of Health Research in Darwin.

Preliminary research into the role of Facebook in helping smokers to quit has found that although the living situations of Indigenous Australians differs widely across the Northern Territory, even those who lack food or clothing may still own a smartphone.

“We know that Aboriginal people use social media at very high rates; it’s been taken up even in remote communities, particularly where people have limited communication through other means,” Ms Hefler said.

Researchers believe Indigenous people use Facebook at higher rates than the overall population, making it one of the most effective ways to reach out.

“Facebook is a more effective way of reaching Indigenous Australians than traditional forms of communication; what we need to figure out is how to harness that message,” Ms Hefler said.

Early findings show that when friends and family talk about quitting smoking on social media, it has a greater effect than traditional hardline anti-smoking ads.

“The people in your Facebook networks influence you the most,” Ms Hefler said.

“In the past, anti-smoking advertising has relied heavily on having a captive audience; we know that smokers don’t like the content they are seeing, but they can’t get away. Now with the advent of Facebook, all you have to do is swipe and the message is gone.”

Cigarettes more popular than fruit in outback stores

Customers in remote Australia spent roughly four and a half times more on cigarettes than fruit and vegetables in 2015-16, said Stephen Bradley, chairman of Outback Stores, a government-owned company which manages 37 businesses in some of the remotest parts of the country.

An incentive program run by Outback Stores to improve community health has resulted in a 0.5 per cent drop in soft drink sales and a five per cent increase in fruit and vegetable sales, but Mr. Bradley admits more needs to be done.

“We remain convinced that a significant dietary change will take many years and our support programs need to operate for the longer term to be effective,” he said.

The Federal Government is aiming to close the gap between Indigenous and non-Indigenous life expectancy within a generation.

Indigenous deaths caused by heart disease and strokes have been dropping but on average Indigenous people are still dying 10 years younger than non-Indigenous Australians.

“Smoking in Aboriginal communities looks quite different to what it does in the rest of Australia,” Ms Hefler said.

“There’s historical reasons why the smoking rate is higher: it’s tied up in inter-generational trauma, and we also know the stolen generations are more likely to smoke.”

Using Facebook to quit

After suffering a heart attack on her 50th birthday, Chuna Lowah is trying to quit smoking, and is hopeful Facebook can help.

Ms Lowah has been a smoker for more than half her life and agrees the tough traditional anti-smoking ads are too easy to ignore.

“On Facebook I have seen some of my friends quitting smoking, using Facebook as a diary, and they’ve been very successful. I’m hoping that sharing my experiences will also help me quit,” she said.

The preliminary research findings from Menzies have been welcomed by NT Territory Labor MP Chansey Paech, whose central Australian electorate of Namatjira has a high Indigenous population.

“Both the Territory and Federal Governments have made significant contributions over the last several years to reduce the rates of smoking, so I’m looking forward to reading the report and seeing what the recommendations are, and hopefully reducing the smoking rate in the Northern Territory, which we know is too high,” he said.

South Australia looks to restrict e-cigarettes

http://www.sbs.com.au/news/article/2016/11/19/south-australia-looks-restrict-e-cigarettes

Electronic cigarettes will be subject to the same restrictions as tobacco products under new laws proposed by the South Australian government.

Under current laws the devices can legally be sold to children and used in places where ordinary cigarettes cannot.

But Substance Abuse Minister Leesa Vlahos says the changes will bring them into line with conventional cigarettes, banning the sale to children, their use in enclosed public spaces and preventing any advertising or promotion.