British American Tobacco says a minimum excise tax in the Autumn Statement would only fuel the black market
UK smokers face a triple whammy in 2017 ahead of Philip Hammond’s Autumn Statement, a British American Tobacco spokesperson said.
With a duty escalator expected and more limitations to come from the EU’s tobacco products directive, BAT said the minimum excise tax proposed by former chancellor George Osborne should be dropped.
The minimum excise tax is effectively a floor price that would hike the price of value-for-money brands in an effort to encourage smokers to quit rather than switch to cheaper brands.
Will Hill is a spokesperson for BAT who said the company, which has a stake in low cost options, would urge the government not to introduce the proposed tax.
Research for the tobacco company by KPMG also showed the tax could increase activity in illicit trading. The study said British smokers who buy low cost brands are more likely to fall into the black market than to quit smoking.
If set at the wrong level, the research shows the tax could cost the Treasury £1.2bn between 2017 and 2020.
The Treasury lost more than £31bn in tax revenue between 2010 and 2015 due to high taxes on alcohol and tobacco, a report by the TaxPayers’ Alliance said.
The company also said the minimum excise tax would run counter to Theresa May’s assurances of a government that works for the many and not just the privileged few.
Plain packaging is a key tobacco control measure that is seeing significant and growing international momentum. Four countries have required plain packaging, and at least 14 are working on it.
The new EU Tobacco Products Directive expressly provides that plain packaging is an option for the EU’s 28 member countries. At COP7, Sri Lanka’s president announced that the country’s health minister was bringing forward a plain packaging proposal.
The fifth edition of the Canadian Cancer Society report Cigarette Package Health Warnings: International Status Report launched at COP7, provides an overview of the status of plain packaging worldwide.
Under plain packaging, health warnings remain on packages, but tobacco company branding, such as colours, logos and design elements are prohibited, and the brand portion of each package is required to be the same colour, such as an unattractive brown. The brand name still appears in a standard font size, style and location. The package format is standardised.
Plain packaging puts an end to packaging being used for product promotion, increases the effectiveness of package warnings, curbs package deception, reduces the appeal of tobacco products, and decreases tobacco use. FCTC Guidelines for implementing Articles 11 and 13 recommend that countries consider implementing plain packaging.
Plain packaging is supported by extensive evidence. The tobacco industry has strongly opposed plain packaging, a signal of just how important plain packaging is. If plain packaging were not effective, then why would the tobacco industry be so opposed?
Tobacco industry opposition in part has come through legal challenges, but the tobacco industry has lost five out of five court decisions: Australia (two cases, 2012, 2015); France (2016); United Kingdom (2016); and European Court of Justice (2016). As well, a legal claim against Uruguay’s significant packaging restrictions (though not plain packaging) was dismissed (2016).
Packages should not be used as mini-billboards to promote tobacco, or to convey that a brand has a “personality” or a lifestyle image.
Packages should not be sold in formats that undermine health warnings, or in special shapes such as superslim packs that associate smoking with fashionability, thinness
and weight loss.
In light of the compelling rationale for plain packaging, many more countries are expected to move this measure forward.
Plain packaging is the right thing to do, and is inevitable. The worldwide trend has become unstoppable.
Canadian Cancer Society
Italy’s vaping population has more than tripled in the past year, bringing the number of e-cigarette users back to the levels of 2013, before the 2014 crash. The Italian market is estimated for 2016 at €295m, a growth of 300% over the previous year. And the trend, according to the latest ECigIntelligence market report, is set to continue with still greater numbers of users in 2017.
One reason for this could be the decrease in prices of several e-cigs products this year – in some categories, a drop of between 24% and 44%. At the same time, the price of traditional tobacco cigarettes has risen.
The industry is optimistic too about future regulation and the implementation of the EU Tobacco Products Directive (TDP). There are currently 1,107 vape stores in Italy and EcigIntelligence expects more to be opened in large urban areas.
Minimal restrictions after TPD
The TDP came into force in Italy in May 2016. Rome imposed minimum restrictions on the industry and the country is one of the most permissive in or outside Europe, according to the most recent ECigIntelligence regulatory report.
Although restrictions have been placed on packaging, and cross-border distance sales – since May it is prohibited to buy e-cig products from companies not established in Italy – advertising is permitted, with certain stipulations, such as the requirement to state that nicotine is addictive.
What This Means: The e-cig industry in Italy has reacted extremely positively to the new TPD regime, with a boom in the number of vapers and vape stores matching the increased visibility of the sector. Though recent rises in tax on traditional tobacco products provide an incentive for smokers to switch to vaping, taxation remains a major concern for the e-cig industry.
E-smoking brand Blu has unveiled its next-generation range ahead of the deadline for retailers to sell off stocks that don’t comply with strict EU legislation.
From 27 May 2017, it will be unlawful to sell vaping products that contravene EU Tobacco Products Directive II (EUTPD II), which focus on quality and safety, and include the requirement for a product warning stating, “This product contains nicotine, which is a highly addictive substance.”
The new EUTPD II-compliant line-up from Blu will roll out on 1 November with improved technology ‘to provide a better experience for consumers’. It includes a PRO e-cig kit, with a Clearomiser mouthpiece, and a selection of e-liquids.
The brand has also launched a guide to EUTPD II to help retailers understand the changes being put in place.
The vaping market was booming, with a retail sales value of £168m and showing an 18% increase on sales last year, according to Jennifer Roberts, vice-president of customer marketing at Blu (UK). “But it’s going to see a lot of change over the next six to nine months as the next stage of legislation comes into effect,” she added.
Retailers should begin to promote non-compliant stock to sell through, said Roberts. “By beginning the changeover to compliant stock as soon as possible, retailers will give a positive message to shoppers and show they understand the category and are a credible vaping stockist.”
E-cigarettes are used by millions in the UK, but information about them is sometimes conflicting. So what is the current evidence on them?
It has been described as a ‘disruptive technology’ potentially capable of breaking our fatal relationship with tobacco. So the setting for a public debate on e-cigarettes – a museum part-funded by the tobacco industry, in a city home to the global headquarters of one of the largest tobacco manufacturers – was perhaps ironic. Yet on Wednesday evening, I found myself at the M-Shed in Bristol, watching just that: a debate about whether e-cigarettes could be part of the solution to the tobacco epidemic.
To mark the launch of a new Integrative Cancer Epidemiology Programme, linked to the Medical Research Centre Integrative Epidemiology Unit at the University of Bristol, Professor Marcus Munafò (Professor of Biological Psychology at the University of Bristol) and Professor Linda Bauld (Professor of Health Policy at the University of Stirling), both collaborators of mine, discussed e-cigarettes. Professor Gabriel Scally (Public Health Doctor and former Regional Director of Public Health for the South West of England) chaired the discussion.
Billed as a debate about whether e-cigarettes might be ‘the key to reducing smoking’, some in the audience may have expected a heated discussion. However, with this line-up of academics, influential in the fields of public health, tobacco and addiction, the discussion was evidence-based and measured. As for the motion of the debate, the panel was unanimous: e-cigarettes may not be the key to reducing smoking, but they are certainly an important part of the solution.
This may be surprising to some, given ongoing discussions surrounding e-cigarettes in the media. So what is the current evidence on e-cigarettes?
Although we don’t know the long-term health effects of e-cigarette use, they’re less harmful than cigarettes
Pretty much everything is safer than cigarettes. There is no other consumer product, which, when used as the manufacturer intends, kills every other user, taking from them an average of 10 years of healthy life.
It’s been said that “people smoke for the nicotine, but die from the tar”. E-cigarettes present a solution to this problem by providing a ‘clean’ (or cleaner) method of nicotine delivery. They deliver nicotine in a similar way to a cigarette (and much faster than other forms of nicotine replacement therapy; NRT), but don’t contain the other chemicals that ultimately kill cigarette users.
A recent Public Health England report stated that e-cigarettes are 95% less harmful than cigarettes, a controversial figure. However, as Linda pointed out, it’s almost irrelevant whether e-cigarettes are 95%, 90% or even 80% less harmful than cigarettes. What’s important, is that they are less harmful.
Yes, there are still some concerns about e-cigarettes and increasing levels of confusion and misinformation among the public around them. Evidence suggests that both adults and teenagers are more likely to report that e-cigarettes are equally harmful as cigarettes today, than they were a few years ago. Both Marcus and Linda speculate that these views may have been shaped by media reports fueled by disagreements between academics.
Horror stories of children drinking the liquid nicotine (a problem which can be alleviated by having stricter controls on safety caps) and fires and accidents caused by exploding devices (the frequency of which is still far lower than the risk of fire posed by cigarettes) have been reported in the media. There are ongoing concerns about the chemicals produced when e-cigarettes are used, some of which are the same as the dangerous chemicals found in burning cigarettes (although the amount of these chemicals is a tiny fraction of the amounts found in cigarettes). Finally, we can’t yet be certain about the long-term health consequences of vaping, simply because people haven’t been using them for long enough to know (just like we didn’t know for decades that cigarettes definitely caused lung cancer).
For these reasons, we should be careful to ensure that children and non-smokers don’t start using e-cigarettes – currently there is very little evidence that these groups are regularly using the devices. However, most academics and public health officials are in agreement that for current smokers, e-cigarettes are a safer alternative to smoking.
E-cigarettes can be an effective method of stopping smoking
Linda presented evidence on the effectiveness of e-cigarettes for smoking cessation. E-cigarettes seem to be somewhere in the middle of the range when it comes to helping smokers quit. Some studies show that they are more effective than either willpower alone or NRT bought over the counter, but less effective than behavioural support.
The type of e-cigarette used matters too. The early models (‘1st generation’ or ‘cigalike’ models) don’t seem to be very effective methods of smoking cessation – interestingly, these are predominantly the models being bought up by the tobacco industry. The 2nd generation e-cigarettes and tank models (which can be refilled with liquids) seem to lead to higher levels of quitting success.
The sheer reach of e-cigarettes is their most powerful weapon. While behavioural support for cessation, combined with NRT or varenicline, has been underused by smokers wanting to quit, the rise of e-cigarette use over the past five years has been unprecedented. There are now an estimated 2.6 million vapers in the UK. With such a large numbers of users, even modest levels of smoking cessation success from their use will have a large impact on cessation rates.
E-cigarettes are a consumer-led revolution
The speed of the e-cigarette revolution and its ability to galvanize a whole community of individuals who now define themselves as ‘vapers’ is impressive. Never before has a route out of smoking garnered as much support from its users. As far as I know, there are no online forums for nicotine patch users to discuss optimal patch placement, no celebrity endorsements for nicotine lozenges and no users of nicotine nasal sprays challenging European Union Directives.
Many vapers feel passionately that e-cigarettes have enabled them to quit smoking. Indeed, a passionate crowd was in attendance at the debate. When asked at the beginning to raise their hands if they had ever tried an e-cigarette, over half of the audience did so. This is in comparison to population surveys that report 1.5%, 16.5% and 58.5% rates of ever use among non-smokers, ex-smokers and daily smokers respectively.
The last question in the debate came from a member of the public who defined himself as a ‘vaper and ex-smoker’. He expressed his dismay that new the EU Tobacco Products Directive (TPD – due to come into force in May 2016) will impose strict regulations on e-cigarettes, including bottle sizes, tank sizes and nicotine strength. In order to continue selling e-cigarettes not meeting these new regulations, retailers can instead apply for their products to be registered as medicines. But this is an extremely costly route, likely to be impractical for the majority of e-cigarette retailers other than the incredibly wealthy tobacco industry. The TPD is currently being challenged by one e-cigarette retailer. However, if it goes ahead, there are concerns from vapers and those in the public health community, that it may mean the end of vaping as we know it.
Arguably one of the reasons why e-cigarettes are so popular is that they reflect a consumer-led revolution, built from the ground up. Users can personalise their product, and many see vaping as a lifestyle choice rather than a smoking cessation aid or a medicine. If strict regulation means fewer smokers switch to using e-cigarettes, this could be a huge public health opportunity missed.
Olivia Maynard is a tobacco researcher at the University of Bristol. You can find her on twitter @oliviamaynard17.
The European Union and US are huge e-cig markets with regulatory models in place. With Malaysia expected to table it’s vape laws soon, Sunday Star headed to Warsaw, Poland, for the recent Global Forum on Nicotine 2016, to see what’s happening globally.
IN May, e-cigarettes and other nicotine vapour products in the European Union (EU) were placed under the regulation of its Tobacco Products Directive (TPD).
In the United States, the “deeming” rule kicks in next month, meaning that e-cigs and vaping will be “deemed” to come under the aegis of the strict Family Smoking Prevention and Tobacco Control Act of 2009 (TCA).
Both these decisions have been challenged by vapers, manufacturers and NGOs that feel the regulations will stifle growth of a product that they claim is less harmful to health than regular cigarettes and that could help smokers give up the much more destructive habit.
However, the TPD and TCA don’t seem to take this into consideration and treat e-cigs and vaping the same way they treat regular cigarettes.
We spoke to industry reps and NGOs at the Global Forum on Nicotine 2016 held in Warsaw recently to survey their opinions on the regulations.
The TPD is meant to harmonise the market but there’s disharmony in its implementation and enforcement, says Gerry Stimson, emeritus professor Imperial College London, forum coordinator and formerly part of Britain’s National Institute for Health and Care Excellence working group that prepared guidelines on tobacco harm reduction.
According to Stimson, each EU member nation must still pass its own legislation to adopt the TPD.
Britain is doing the barest minimum but Poland and Spain are adding a ban on online and cross-border sales.
“That will kill e-cigs because everybody buys things on the Internet these days,” he sighs.
He expects the TPD to result in an e-cig industry dominated by large companies, with vapers seeing fewer products and less information in the market.
“The US ‘deeming rule’ is a magnification of the TPD’s problems. Looking at what we have now, perhaps Malaysia can come up with a better model for Asia to follow,” he says.
ECigIntelligence.com, the Britain-based independent resource that tracks regulations and market information for the e-cig sector, agrees that the TPD is not being implemented or enforced consistently. Barnaby Page, its editorial director, discusses the impact of some of the regulations at the forum.
“The TPD lists e-liquid ingredients that aren’t allowed so manufacturers follow the same standards across Europe. Then you get to Germany, and the list is more extensive with lots of small print.”
And while the under-18 sales ban is widely accepted, the approach to online sales differs among EU members, Page points out: member states can either ban, permit or only allow online sales within their respective borders.
Advertising on TV and radio and in print and online are outlawed but in-store and outdoor advertising (like billboards), are allowed. But, as with online sales, there is a mosaic of approaches across the continent, says Page: some countries, like Slovenia, allow outdoor but not in-store advertising while it is the reverse in Austria.
Furthermore, “E-cig taxation isn’t mandated by the TPD but there’s a huge variation in rates in the countries that impose a tax. In Serbia, the tax is €0.03/ml (S$0.04) while it is nearly €0.40/ml in Italy,” he says.
While the TPD recognises that non-nicotine products are not the same as nicotine, many countries still equate vaping with smoking.
According to Dr Miroslaw Dworniczak, Poland is among Europe’s top three e-cig markets, thanks to the lack of regulation.
The former scientist and lecturer at the Department of Chemistry, Adam Mickiewicz University, was a smoker for 35 years before he started Poland’s first vaping blog six years ago.
The Polish Government, he says, already has a draft legislation that will be implemented soon that goes even further than the TPD restrictions.
He worries particularly that a ban on online sales will deny those in smaller cities and the villages access to e-cigs. An online ban will halve the number of vapers, he predicts.
Poland, he says, is aiming to be a nicotine-free country by 2030 but for now e-cigs can be sold everywhere and to everyone, including minors.
“But soon, e-liquids and every e-cig component, like the battery and atomiser, must be registered.
“Product approval will take at least six months but e-cigs evolve rapidly. By the time retailers can sell the product, something new would have come along,” he says.
Poland’s largest e-cig supplier was bought over by a big tobacco company last year. And he foresees smaller shops being swallowed up soon when the regulations cause costs to soar.
Vapers there are trying to call for a public hearing to amend the draft legislation before it becomes law.
“The law should be as short as possible but the EU loves long legislations. The TPD should only have a ban for minors, a requirement for e-liquid analyses and proper labelling. Enough,” he argues.
The TPD isn’t ideal nor is the EU ready to regulate the industry but at least there’s something in place, observes Dr Farsalinos with a shrug.
“The transition period for implementation of the TPD is until November. But there’s still no submission system for product analysis and testing reports.
And there are some unnecessary restrictions that have nothing to do with quality or safety.”
Like Dr Dworniczak, he feels the six-month waiting period before a product can be released into the market is too long. Two to three weeks, he argues, is sufficient.
While he agrees that the TPD will slow down product innovation, the researcher at the Onassis Cardiac Surgery Center and University of Patras in Greece doesn’t think hefty cost complaints are justified.
“Yes, it costs money to implement but so does every other regulation. Companies should invest in the safety and quality of what they put out.”
Dr Farsalinos believes the TPD is much more sustainable and realistic than US regulations.
The problem, he explains, is the use of the Family Smoking Prevention and Tobacco Control Act (TCA) to govern e-cigs in the United States. This is because the TCA focuses mainly on preventing new tobacco products from being developed and marketed.
“When you apply a law like that to e-cigs, it’s effectively a ban on vaping. That’s why everyone’s taking the government to court.”
Patricia I. Kovacevic is the general counsel and chief compliance officer of an American e-liquid and vaping device manufacturer; she also sits on the Global Tobacco and Nicotine Forum advisory board and the Vapour Technology Association board.
Generally, she says, the TCA gives the US Food and Drug Administration (FDA) the authority to regulate tobacco products. Through the “deeming rule”, however, the FDA has extended that authority to include things not derived from tobacco – like e-cig devices and non-nicotine e-liquids – because of the way they might be used with nicotine.
Since the FDA’s deeming rule was published in May, “All e-cigs and vaping products in the US are categorised as new tobacco products so pre-market applications for every items – including e-cig parts like coils and mouth pieces – must be filed with the FDA.
“It’s not realistic. Many will go out of business as innovation comes to a screeching halt,” she says, adding that other deeming rule requirements include filing product health effect reports, having nicotine and tobacco warning labels, as well as bans on sampling and modified exposure claims.
The deeming rule will come into force next month but the requirements will be implemented in stages.
The biggest problem, she feels, is the lack of product standards and good manufacturing practices.
“The FDA’s concern isn’t to make safer products for consumers but rather to take most products off the market,” she feels.
At least five lawsuits challenging the deeming rule have been filed in the United States, she says.
“The courts can either rule that no changes be made, set aside the deeming rule and force the FDA to go back to the drawing board, or set aside parts of the deeming rule or of the TCA.
“The cases could even end up in the Supreme Court on appeal.”
Dismissing the use of the EU’s TPD and America’s TCA to regulate e-cigs as “rubbish”, Clive Bates says they have resulted in an outcome that’s “worse than doing nothing”. He is the director of Counterfactual Consulting, a Britain-based public interest consultancy and advocacy practice.
As an example, he questions the sales ban to those under 18: This, he feels, is a political rather than a public health benefit decision because studies show that smoking has declined at a slower rate in states that ban e-cig sales to those under 18.
That, he says, is an example of an unintended consequence of a well-meaning policy.
Stressing that regulations must benefit consumers, he insists that the main objective of any government must be to reduce disease and promote informed choices.
Regulators must be rigorous about unintended consequences of policy interventions, he warns.
“So before you intervene, make sure you’re not making things worse.”
Industry-funded International Tax and Investment Center responds to criticism by attempting to muddy the waters
The tobacco industry is under attack. In just two weeks, in May 2016, its tactic of challenging any law that threatens its profits, took a big hit. The arbitration panel, that tobacco giant Philip Morris International (PMI) had hoped would overturn standardised packaging legislation in Australia, published its full ruling that the company’s self-serving claims were inadmissible. Just days later, all four major tobacco companies lost their challenges against both the European Union’s Tobacco Products Directive and standardised packaging legislation in the UK.
This means that from 20 May 2017 EU member states must ensure that health warnings cover 65% of the tobacco pack and are free to introduce standardised packaging for tobacco products. The UK, France and Ireland, which have already enacted standardised packaging legislation, will now go ahead with this brand removal. Further afield Canada, New Zealand, Hungary and Norway are due to follow suit and other countries which have expressed an interest will be buoyed by the way the industry’s legal and trade challenges to plain packs are being soundly rejected. The World Health Organization’s (WHO) slogan for World No Tobacco Day 2016 was “Get Ready for Plain Packaging” recognising that the removal of branded tobacco packaging is “going global.”
Each jurisdiction to consider standardised packaging legislation has received sustained attacks from tobacco companies, using both their own voices and those of third parties which they fund. By commissioning and publicising research reports and opinions from seemingly independent experts, tobacco companies have created not only the impression of a large network of opposition but of an illusory body of evidence, particularly in relation to the industry argument that standardised packaging will increase the illicit tobacco trade.
PMI private documents, leaked to Action on Smoking and Health (UK), revealed that “broad third-party media engagement” and “high profile opinion pieces” would be used to raise awareness of such arguments among “decision makers and the general public” as part of its attempt to prevent standardised packaging in the UK. These documents also revealed that PMI intended to use the International Tax and Investment Centre (ITIC) as one of its key “media messengers”. Since 2012, PMI has paid ITIC (in collaboration with global advisory firm, Oxford Economics) to produce annual reports on the illicit trade in Asia. These claimed that illicit trade is increasing in the region but have been accused of being methodologically flawed. When publicly available routine data was used in an attempt to replicate ITIC’s findings in Hong Kong, illicit levels were found to be under half of what ITIC had estimated.
Key to the industry’s use of third parties is its attempt to shift the paradigm by presenting third parties as ‘independent experts’ and their research as ‘trustworthy and rigorous’ while simultaneously positioning public health academics as ‘advocates’ and ‘zealots’ and their research as ‘advocacy’. This presentation of corporate pawns as informed moderates producing quality work and public health researchers as misguided fundamentalists producing poor quality work is a public relations tactic employed for decades by corporations in relation to environmental and health issues.
Over the last few weeks this tactic has been adopted by the tobacco industry third party, ITIC, in a series of letters sent to Non-Governmental Organisations (South East Asia Tobacco Control Alliance (SEATCA), ASH (UK), EU SmokeFree Partnership), the University of Bath in the UK, and the Editors of Tobacco Control, all of whom had criticised ITIC’s activities, some in letters, reports and webpages. ITIC’s letters made three inter-related claims, each of which we explore in the paragraphs below.
First, that public health research should be seen as advocacy while, by contrast, ITIC’s research (none of which appears to be peer-reviewed) should be seen as high quality. For example, in his letter to the University of Bath the President of ITIC, Daniel Witt, claimed: “We have become increasingly concerned about how the integrity of reputable institutions and individuals is maligned by overzealous advocacy ….. and ….by what passes for academic research when it is clearly constructed to fulfil an advocacy agenda”.
This denigration of public health research has been strongly criticised by independent experts. In her 2006 verdict in an extortion case against the tobacco industry in the United States Judge Gladys Kessler noted: “Much of the Defendants’ [i.e. the tobacco industry’s] criticisms of Government witnesses focused on the fact that these witnesses had been long-time, devoted members of “the public health community.” To suggest that they were presenting inaccurate, untruthful, or unreliable testimony because they had spent their professional lives trying to improve the public health of this country is patently absurd”.
The recent high court ruling on the challenges made by British American Tobacco, PMI, Japan Tobacco International and Imperial Tobacco to UK standardised packaging legislation made a similar point, citing Sir Cyril Chantler’s 2015 review of the evidence: “Chantler … rejected the criticism made by the tobacco companies that those that advised the Government were biased against the industry. Conversely, he articulated scepticism about the methodological efficacy of research results generated by the tobacco companies. He also criticised the tobacco companies for adopting unrealistic criticisms of the output of existing researchers…”
This ruling drew upon two peer-reviewed papers, one confirming the poor quality of industry evidence in comparison to public health evidence on standardised packaging and the other paper showing how BAT and JTI went about distorting and misrepresenting public health evidence.
ITIC’s second claim is that it is not a lobby group. Yet based on widely accepted definitions of lobbying, ITIC’s own descriptions of its activities, and the global health communities’ observations of its behaviour, ITIC clearly acts as a lobbying organisation.
Indeed, it has persistently boasted of its lobbying success. in 1995, ITIC produced a document which outlined how “ITIC has developed trusted, advisory relationships with key, senior-level policy makers…..[which]…provide channels for private sector expertise to reach the Government before, during and after the official policy-making process. This combination…… provides ITIC and its sponsors a ‘seat at the policy-making table’”. And in 2004, Daniel Witt, ITIC’s President noted: “ITIC is a public policy organization actively work ing to change public policy in a pro-investment direction.” Although ITIC claims to be an “independent, non-profit research and educational organization” it receives tobacco company funding and has industry representatives on its Board of Directors. Outputs such as the Asia-11 and Asia-14 illicit trade indicator studies, commissioned by PMI and published by ITIC along with global advisory firm Oxford Economics, have been critiqued by Dr Hana Ross (on behalf of SEATCA) for opaque methodology and “unverifiable” results that were “inconsistent with results from other studies” in the region (for more on this issue, read here). In 2014, ITIC was blasted by the WHO for its underhand attempt to destabilise the proposed guidelines on tobacco tax and price policy by convening a meeting with Parties and Observers to the Framework Convention on Tobacco Control (FCTC) immediately prior to the sixth Conference of the Parties (COP6).
Finally, in each letter, ITIC’s President, Daniel Witt argues that public health organisations ought to engage with ITIC given its tax expertise. This position displays a fundamental misunderstanding of the FCTC’s Article 5.3 which aims to protect policy making from the vested interests of the tobacco industry. It also displays a fundamental lack of understanding of public attitudes to ITIC. For example, the World Bank withdrew from an ITIC event in India, following a letter from the Institute of Public Health in the country, similarly, following a letter from ASH (UK), the UK Department for International Development (DfiD) asked ITIC to remove its name, from its list of sponsors on ITIC’s website as DfiD has never been a sponsor, and the WHO has urged all governments not to engage with ITIC.
SEATCA and the University of Bath have respectively published and sent to ITIC detailed rebuttals of ITIC’s letters to them. These rebuttals and the aforementioned high court rulings are unlikely to deter ITIC from trying to influence tobacco control policies such as standardised packaging across the globe and undermining Article 5.3 of the FCTC. But the more people who reject engagement with ITIC, the harder it will be for ITIC to boast that it can get its tobacco industry clients a “seat at the policy making table”.
The tobacco industry is a demanding one, and with production lines operating almost continuously, coding and marking systems need to be able to operate reliably at speeds of up to 1,000 packs per minute.
It is also a highly regulated industry, and demand for coding and marking solutions that can also help manufacturers to achieve compliance is increasing. At present there are two major initiatives in the industry – the Tobacco Product Directive 2 (TPD2) from the European Union, and the Framework Convention of Tobacco Control (FCTC) from the World Health Organisation, both of which require tobacco companies to track and trace products throughout the supply chain in order to try and avoid illicit products entering the market.
A challenging environment
In order to comply with track and trace requirements, manufacturers have to ensure that every single product they supply to the market carries a unique code or number.
There are two ways in which the industry can achieve this. One is by utilising serialized tax stamps, provided by approved authorities. The other is to perform direct serialization marking on the product. Some direct serialization marking can offer authorities features similar to tax stamps (digital fiscal marking).
Aggregation is a key technical step to implement effective tracking and tracing of products throughout the supply chain. To date, aggregation based on tax stamps has failed to be successfully demonstrated on all manufacturing equipment. On the contrary, aggregation has been implemented based on direct marking on all type of machines.
Tax stamps are also causing manufacturers some difficulties, as they can cause significant decreases in production efficiency. This is an unwelcome issue for any manufacturing business to deal with, and many believe that if they move to online coding (with digital fiscal marking), which can ensure the same level of security as a typical tax stamp, then line speeds would not be affected. Tax stamps, although sophisticated in terms of the information they carry, are also becoming more widely counterfeited. The industry believe that these counterfeited tax stamps are not only causing problems for the producers, but also for the security element that they are obliged to provide.
Countries in the EU, for example, have to develop a system which complies with TPD2 – which requires a track and trace system to be in place that gives each individual package a unique identifier containing machine, date and time references. Serialized tax stamps are not able to comply with this requirement. In addition, the unique identifier must be non-removable and must be clearly visible on the pack, so whenever a customs authority scans the product they can ensure the product is intended for that specific market. The number should be visible at pack level as it is the lowest unit size sold on the market. The issue is that tax stamps can be removed, and therefore the track record of a pack can be lost entirely. This creates a big problem, as governments are looking to have a clear understanding of how many products are being entered into the market, as every product will generate a specific amount of tax income for that government. If they can’t track the products they will see the widespread problem of illicitly traded products being shipped into markets where they were not intended to be used.
The price variations across Europe are significant, and are a main driver of illicit trade. If a truck full of illicit cigarettes is diverted to the UK from a nation where that product is far cheaper, the government will not see any tax revenue and the supplier company will not see any kind of revenue if they are successfully smuggled in – as they could theoretically sell these products at a much higher price. This is why the industry is fighting hard to stamp out illicitly traded and counterfeit tobacco products.
Counterfeiting and illicit trade will cost approximately 60bn dollars in losses this year alone and there are several reports from KPMG, PWC and many official authorities who are highlighting this subject. This is why the EU and the World Health Organisation (WHO) have introduced the requirement for end to end track and tracing of tobacco products, as it allows them to ensure that individual packs, bundles and cases can be fully aggregated and synchronised with what is expected to be available on the market.
How can Videojet technologies help manufacturers to remain compliant?
Track and trace is a challenging requirement for the tobacco industry. Today the tobacco industry is responding to this challenge by promoting direct marking solutions such as Codentify. To date, the tobacco industry has tracked millions of packs around the world over a period of more than 10 years. Videojet has successfully demonstrated its commitment with the tobacco industry and has developed an interface to the tobacco solution that not only provides integration flexibility into multiple points on the line, but is also flexible enough to be used with the majority of coding equipment (Continuous Inkjet (CIJ), laser, Thermal Inkjet (TIJ) or label applicator) and track and trace software. This allows manufacturers to remain compliant.
For example, in the case of digital fiscal marking, individual packs are marked with unique identifiers that have been authorised and accounted for by the government of the country in which the products are intended for sale. In addition, by employing serialization on the higher packaging levels, aggregation can be recorded.
Tracking of the product through the supply chain can then be recorded by scanning the higher packaging level and information can be retrieved by all relevant stakeholders.
Now, when products that have undergone this process reach the border of the country they are shipped to, customs at that point can read the code and can tell immediately if the products present are entitled to be allowed into the country. If the codes present are not within the acceptable range issued by the government, they will either be shipped back to point of origin, or destroyed at the manufacturer’s expense. At the same time, any products that arrive without a code are instantly recognized to be out of place and will receive the same treatment.
This comprehensive approach also allows governments and manufacturers to tackle diversion, as if a shipment goes missing it will be evident at which point in the process the products disappeared – allowing investigative action to be taken in order to prevent further occurrences.
Videojet coding and marking technologies offer a solution to manufacturers with regard to traceability and digital fiscal marking, helping manufacturers to meet regulations while keeping production efficiency at maximum levels. Products can be coded at speeds of up to 1,000 packs per minute, meaning production schedules are not affected.
Looking to the future
Serialization and track and trace initiatives can be successfully implemented through the use of coding and marking systems. Their ability to operate in conjunction with serialization enables manufacturers to remain compliant, at the same time protecting profit margins as well as brand reputation.
Videojet, thanks to its successful partnerships with a number of specialist suppliers, is able to deliver turnkey solutions to manufacturers for track and trace, providing aggregation and line management solutions and ultimately helping to stamp out counterfeiting and illicit trade.
Major changes to tobacco laws have come into force today, May 20.
One of the most high-profile changes comes in the form of new standardised packaging – which will see all cigarette cartons be the same drab green colour.
At the same time, we are now no longer able to get 10-packs of cigarettes (sorry social smokers) – and we can start saying goodbye to menthol smokes.
There’s a lot to take in with the new laws, so we’ve put it all together for you.
Wait, what is this new law?
It is officially known as the Tobacco and Related Products Regulations 2016, which is part of the EU’s Tobacco Products Directive (or TPD for short).
Basically it’s an overhaul of our laws around the sale, advertising and packaging of tobacco products, such as cigarettes and vapes.
What’s happening to cigarette packaging?
The introduction of standardised, plain packaging is a major success for smoking health campaigners.
Under the new law, all cigarette boxes will be one uniform colour – a dull green – and will be the exact same size and shape.
All of the fonts will now be a standardised too, as will the colour, size, case and alignment of any text.
And logos will be strictly prohibited (a fact that caused particular contention with four tobacco giants).
They will also have much larger health warnings which, with a graphic picture and text, will take up 65 per cent of the front and the back of the boxes.
Campaigners from Action on Smoking and Health (ASH) and Cancer Research have hailed the packaging change as a victory, mainly because of… well, this.
Shops now have a year to get rid of the boxes they still have, before they’re totally replaced in May 2017.
I usually smoke menthols, they’re okay right?
Nope – from today menthols are going to be phased out, ready for a total ban in May 2020.
Deborah Arnott, chief executive of ASH, told Metro.co.uk: ‘There is evidence to show that menthol in cigarettes makes it easier for children to try smoking and to become addicted regular smokers.
‘That’s why ASH supports the ban on menthol cigarettes.’
Did you say I can’t buy 10-packs anymore?
Yep – the cheap 10-packs of cigarettes are now withdrawn from production.
Shops and companies now have a year to basically sell up stock, before they’re totally replaced in May 2017.
It’s hoped that by getting rid of the small, cheap packets, fewer people will be tempted to take up smoking.
You also won’t be able to buy bags of loose tobacco that weigh less than 30g.
What about my lite, organic, all-natural smokes?
Stop right there! Cigarettes that are branded ‘lite’, ‘natural’ and ‘organic’ are now a thing of the past.
This is because these descriptors are actually pretty misleading, making you subconsciously think that type of cigarette is healthy.
What about shisha and other flavoured tobacco?
Flavoured tobacco is now banned outright.
However shisha, aka hookah or water pipe, is exempt from this ban.
A Department of Health spokeswoman told Metro.co.uk that this is because shisha tobacco doesn’t sell in high enough volumes to merit being outlawed completely.
But shisha tobacco will now be subject to the same packaging laws as explained above.
What about e-cigarettes?
E-cigarettes are now subject to a whole new set of regulations.
For example, the advertising of vapes is now almost totally banned.
Plus, any e-cigs with a nicotine concentration above 20mg/ml will need to be licensed as a medicine and therefore subject to the same strict regulations as over-the-counter drugs.