Clear The Air News Tobacco Blog Rotating Header Image

June, 2014:

Mediational pathways of the impact of cigarette warning labels on quit attempts

http://www.ncbi.nlm.nih.gov/pubmed/24977309

Abstract

OBJECTIVE:

To test and develop, using structural equation modeling, a robust model of the mediational pathways through which health warning labels exert their influence on smokers’ subsequent quitting behavior.

METHOD:

Data come from the International Tobacco Control Four-Country Survey, a longitudinal cohort study conducted in Australia, Canada, the United Kingdom, and the United States. Waves 5-6 data (n = 4,988) were used to calibrate the hypothesized model of warning label impact on subsequent quit attempts via a set of policy-specific and general psychosocial mediators. The finalized model was validated using Waves 6-7 data (n = 5065).

RESULTS:

As hypothesized, warning label salience was positively associated with thoughts about risks of smoking stimulated by the warnings (β = .58, p < .001), which in turn were positively related to increased worry about negative outcomes of smoking (β = .52, p < .001); increased worry in turn predicted stronger intention to quit (β = .39, p < .001), which was a strong predictor of subsequent quit attempts (β = .39, p < .001). This calibrated model was successfully replicated using Waves 6-7 data.

CONCLUSION:

Health warning labels seem to influence future quitting attempts primarily through their ability to stimulate thoughts about the risks of smoking, which in turn help to raise smoking-related health concerns, which lead to stronger intentions to quit, a known key predictor of future quit attempts for smokers. By making warning labels more salient and engaging, they should have a greater chance to change behavior.

Philip Morris International – Investor Relations – Press Release

http://investors.pmi.com/phoenix.zhtml?c=146476&p=irol-newsArticle_Print&ID=1942860

Philip Morris International Inc. (“PMI”) Hosts Investor Day

Revises 2014 Full-Year Reported Diluted EPS Forecast for Estimated Restructuring Costs in the Netherlands;

Announces Acquisition of U.K.-Based E-Vapor Company;

Reviews Business Outlook and Strategies

NEW YORK–(BUSINESS WIRE)–Jun. 26, 2014– Regulatory News:

Philip Morris International Inc.’s (NYSE / Euronext Paris: PM) senior management will offer its perspective on the company’s business outlook and long-term growth strategies at a two-day investor meeting starting today at approximately 9:00 a.m. (Swiss time) at its Operations Center in Lausanne, Switzerland.

“2014 is proving to be a complex and truly atypical year for PMI,” said André Calantzopoulos, Chief Executive Officer.

“In addition to our exciting plans for the global roll-out of our Marlboro Architecture 2.0 and our new commercial approach, we are on the verge of leading a paradigm shift with the accelerated commercialization of our Reduced-Risk Products.”

“We continue to face significant currency headwinds, an improving but weak macro-economic environment in the EU and known challenges in Asia, partly offset by a robust performance in a number of markets and the contribution of our business development initiatives. Furthermore, we have recently witnessed significant price discounting at the low end of the market in Australia which, were it to persist, could lead us to be at the lower end of our 2014 guidance for full-year currency-neutral adjusted diluted EPS growth of 6%-8%.”

2014 Full-Year Forecast

The company revises its 2014 full-year reported diluted earnings per share (“EPS”) forecast to be in a range of $4.87 to $4.97, versus $5.26 in 2013, compared to a range of $5.09 to $5.19 as previously announced on May 7, 2014.

On an adjusted basis, diluted EPS are projected to increase in the range of 6% to 8% versus adjusted diluted EPS of $5.40 in 2013, reflecting:

· a $0.01 per share charge recorded as asset impairment and exit costs in the first quarter of 2014 relating to the decision to cease cigarette production in Australia by the end of 2014;
· a pre-tax charge, related to the contemplated decision to discontinue cigarette production in the Netherlands in 2014, of approximately $495 million, or $0.24 per share, the majority of which is expected to be recorded in the second quarter of 2014; and
· an unfavorable currency impact, at prevailing exchange rates, of approximately $0.61 for the full-year 2014.
The adjusted diluted EPS of $5.40 in 2013 is calculated as reported diluted EPS of $5.26, plus a $0.02 per share charge related to discrete tax items and a $0.12 per share charge related to asset impairment and exit costs.

This forecast includes a productivity and cost savings target of $300 million and a share repurchase target of $4.0 billion. This forecast excludes the impact of any future acquisitions, unanticipated asset impairment and exit cost charges, future changes in currency exchange rates and any unusual events.

The factors described in the Forward-Looking and Cautionary Statements section of this release represent continuing risks to these projections.

Global Footprint Optimization

On April 4, 2014, the company announced the initiation by its affiliate, Philip Morris Holland B.V. (“PMH”), of consultations with employee representatives on a proposal to discontinue cigarette production at its factory located in Bergen op Zoom, the Netherlands. PMH has reached an agreement with the Trade Unions and their members on a social plan and, subject to the fulfillment of certain other conditions, PMH plans to cease cigarette production by September 1, 2014.

As a result, PMI expects to incur a pre-tax charge of approximately $495 million, or $0.24 per share, the majority of which is expected to be recorded in the second quarter of 2014, reflecting approximately $356 million related to employee separation costs and approximately $139 million related to asset impairment costs. Of the $495 million, approximately $418 million will be paid in cash, of which $181 million will be paid in 2014.

E-Vapor Acquisition

The company announced its acquisition of 100% of Nicocigs Limited (“Nicocigs”), a leading U.K.-based e-vapor company whose principal brand is Nicolites. The transaction is not subject to regulatory approval and is not material to PMI’s 2014 consolidated financial position, results of operations or cash flow.

“This acquisition is complementary to our previously announced agreement for the license and distribution of Altria Group, Inc.’s e-vapor products. In addition, it provides PMI with immediate access to, and a significant presence in, the growing e-vapor category in the U.K. market, as well as a strong retail presence, which further complements the current restructuring of our distribution arrangements in the U.K.,” said Drago Azinovic, PMI’s President, European Union Region.

Nicocigs was founded in 2008 and is headquartered in Birmingham, U.K. The company employs a field force of approximately 40 sales representatives and distributes to more than 20,000 points of sale within the UK. Nicocigs’ 2014 April year-to-date retail share, as measured by Nielsen, was 27.3%.

The U.K.’s e-vapor category has an estimated retail value of approximately $350 million.

Investor Day Highlights

Presentations, outlining the company’s strategies for growth, will be made by: André Calantzopoulos, Chief Executive Officer; Bertrand Bonvin, Senior Vice President, Research & Development; Manuel Peitsch, Vice President, Biological Systems Research; Frederic de Wilde, Senior Vice President, Marketing & Sales; Drago Azinovic, President, European Union Region; Matteo Pellegrini, President Asia Region; Martin King, President, Latin America & Canada Region; Miroslaw Zielinski, President, Eastern Europe, Middle East & Africa Region and PMI Duty Free; Antonio Marques, Senior Vice President, Operations; and Jacek Olczak, Chief Financial Officer.

Volume Highlights:

· In 2014, the company forecasts a decline in total cigarette industry volume, excluding China and the USA, in a range of 2%-3%;
· As of 2015, the company is cautiously optimistic that such total cigarette industry volume decreases will be closer to the previous historical average of 1%-2%;
· The company forecasts a moderate decline of the total industry in the EU Region in 2014 to a range of 5.0%-6.0% and, assuming continued macro-economic improvement and a continued deceleration in the growth of the overall e-vapor category, to approximately 5.0%-6.0% in 2015 and to 4.0%-5.0% thereafter; and
· As of 2015 and for the near term, the company expects its annual volume to remain flat to down by 1.0%.
Net Revenues, Operating Companies Income (“OCI”) and Earnings Per Share (“EPS”) Highlights:

· As of 2015 and for the near term, the company aims to return to currency-neutral, net revenue and adjusted OCI growth within its annual average 4%-6% and 6%-8% mid- to long-term target ranges, respectively;
· As of 2015 and for the near term, the company targets ex-currency adjusted diluted EPS growth in the range of 8%-10%, reflecting share repurchases in the range of $2 billion to $3 billion per year; and
· Within the next three to four years, the company anticipates that its Reduced-Risk Products will become accretive to its bottom line and then will represent an upside to all the metrics of its growth algorithm, including volume.
Reduced-Risk Products Portfolio Highlights:

· The company described the brand platform that it has chosen to commercialize the electronic system of its Platform 1 product;
· The company intends to commence a pilot city test of its Platform 1 product in Italy and in Japan in the fourth-quarter of 2014 and to expand nationally in 2015;
· In 2016, the company anticipates launching a proprietary e-cigarette that it believes will provide adult smoker satisfaction and a nicotine delivery profile comparable to combustible cigarettes; and
· Due to incremental expenses in support of its clinical trials and commercialization initiatives, the company assumes its Reduced-Risk Products portfolio will have a negative OCI impact in 2014, 2015 and 2016, which is included in the company’s near-term growth algorithm. However, the OCI contribution of Reduced-Risk Products should become neutral or positive thereafter.
Operational, Marketing and Other Financial Highlights:

· The company targets Regional annual average adjusted OCI growth, ex-currency, over the mid to long-term of:
o Low single-digit in the EU;
o Low double-digits in EEMA;
o High single-digit in Asia; and
o High single-digit in Latin America & Canada
· In the mid-term, reflecting the strength of its brand portfolio, the company anticipates continued pricing in line with its historical average increase of approximately $1.8 billion per year;
· The company provided an update on its growth strategy for the Marlboro brand under the Marlboro Architecture 2.0 project and the progress of the company’s commercial approach global initiative;
· During the period 2015-2017, the company aims to limit the growth of its annual cost of goods sold to a range of 1%-3%, excluding Reduced-Risk Products, volume/mix and currency; and
· The company reaffirms its annual dividend target payout ratio of 65%.
The presentations and Q&A sessions will be webcast live both days at www.pmi.com/2014InvestorDay in a listen-only mode beginning today, at approximately 9:00 a.m., and concluding at approximately 6:00 p.m. The webcast will resume tomorrow, June 27, 2014, at approximately 10:00 a.m. and conclude at approximately 12:45 p.m. Times are local Swiss. A copy of remarks and slides, along with an archive of the webcast, will be made available at www.pmi.com/2014InvestorDay.

This release may contain projections of future results and other forward-looking statements that involve a number of risks and uncertainties and are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. PMI is further subject to other risks detailed from time to time in its publicly filed documents, including the Form 10-Q for the quarter ended March 31, 2014. PMI cautions that it does not undertake to update any forward-looking statements that it may make, except in the normal course of its public disclosure obligations.

Reduced-Risk Products

Reduced-Risk Products (“RRPs”) is the term the company uses to refer to products in various stages of development for which it is conducting extensive scientific studies to determine whether it can support claims of reduced exposure to harmful and potentially harmful constituents in smoke (also referred to as “HPHCs”), and ultimately claims of reduced disease risk when compared to smoking combustible cigarettes. Before making any such claims, the company will need not only rigorous data to substantiate reduced risk but may also require government review and approval, as is the case in the USA today.

About Philip Morris International Inc.

Philip Morris International Inc. (PMI) is the leading international tobacco company, with seven of the world’s top 15 international brands, including Marlboro, the number one cigarette brand worldwide. PMI’s products are sold in more than 180 markets. In 2013, the company held an estimated 15.7% share of the total international cigarette market outside of the U.S., or 28.2% excluding the People’s Republic of China and the U.S. For more information, see www.pmi.com.

http://investors.pmi.com/phoenix.zhtml?c=146476&p=irol-newsArticle_Print&ID=1942860

Source: Philip Morris International Inc.

Investor Relations:
New York: +1-917-663-2233
Lausanne: +41 (0)58 242 4666
or
Media:
Lausanne: +41 (0)58 242 4500

Early evidence about the predicted unintended consequences of standardised packaging of tobacco products in Australia

Download (PDF, 789KB)

Australia: a cross-sectional study of the place of purchase, regular brands and use of illicit tobacco

Download (PDF, 777KB)

Electronic Cigarette Executives Get Schooled in Senate Hearing

“I think we have seen this movie before,” Senator Richard Blumenthal said. “It is called big nicotine comes to children near you and you are using the same kinds of tactics and promotions and ads that were used by big tobacco and proved so effective”

http://time.com/2896962/electronic-cigarette-executives-get-schooled-in-senate-hearing/

In a hearing Wednesday afternoon that harkened back to the famous congressional Big Tobacco hearings two decades ago, Senators on the Commerce, Science and Transportation Committee eviscerated electronic cigarette executives Jason Healy, CEO of blue eCigs (owned by tobacco company Lorillard), and Craig Weiss, CEO of NJOY, leaders of the two leading e-cig brands.

The hearing was on the marketing practices by the electronic cigarette industry, which the Senators said appeals directly to kids, a lift straight from the tobacco industry’s playbook, when it began in the 1950s to try and hook young people early to addictive nicotine. Though nicotine is not the carcinogenic ingredient in tobacco cigarettes, it is the culprit behind why so many continue to smoke, and it’s hardly a benign substance either. Nicotine is highly toxic on its own, and there has recently been an increase in calls to poison control centers after contact with electronic cigarette liquid containing nicotine. Nor is the substance good for the developing teen brain.
The Senators and those offering testimony at the hearing, which included electronic cigarette executives and representatives from public health organizations, were in agreement that electronic cigarettes should not be sold to kids under the age of 18. At issue was whether the marketing practices employed by electronic cigarette makers, which are currently unregulated by the federal government, were designed to appeal to kids.

At the hearing, the e-cigarette executives were skewered by the Senators who had the facts on their side. A recent CDC report showed that the use of electronic cigarettes by middle school and high school students doubled from 2011 to 2012. The same survey showed that more than 1.78 million middle and high school students nationwide have tried electronic cigarettes. A recent American Legacy Foundation report found that last year 14 million kids saw ads for electronic cigarettes on TV, 9.5 million saw them in print.

A study from RTI International and the Florida Department of Public Health published in the Journal of Pediatrics showed that exposure to electronic cigarette advertising jumped 256% from 2011 to 2013 among adolescents aged 12 to 17. Mr. Healy’s company, blu eCigs was found responsible for almost 82% of the ads that reached that age group.

Slumped in their chairs, the beleaguered executives, Mr. Weiss and Mr. Healy, argued that their marketing was not directed at kids, but adults. Electronic cigarettes, both men argued, are designed to entice those who already smoke to use the product, claiming they are a valuable public health tool to help wean the 40 million adult smokers off of deadly cigarettes. “It is our corporate mission to [make] obsolete the combustion cigarette,” Weiss testified.

“Every time I use an e-cigarette instead of a combustible cigarette, that’s a good decision,” said Mr. Healy, a smoker who “vapes” (inhales through the e-cigarette vaporizer).

Healy and Weiss aren’t wrong that electronic cigarettes hold promise to improve the nation’s well-being if they can get America’s smokers off of combustible cigarettes–a view held by many in public health. Scientific research has not yet determined how or whether electronic cigarettes can really get people to quit smoking, but it is a technology we should embrace to see if it can. As Mitch Zeller, head of the FDA’s Center for Tobacco Control has said: “We have to have an open mind on the potential for these emerging technologies to benefit public health.”

But Senators including Richard Blumenthal (D-Connecticut) and Amy Klobuchar (D-Minnesota), both former prosecutors, undermined those health promotion claims during cross-examination, calling into question the brands’ use of celebrities, social media, free cigarettes, and TV and print advertisements in major television markets (NJOY advertised during the Super Bowl), and flavors that appeal to kids.

“The only difference between your testimony today and testimony of the tobacco executives is that you are not under oath,” said Senator Blumenthal. “I find in your testimony a sense of denial that I cannot credibly accept because it is defied by the numbers. 18 million teens were exposed to blu’s print TV ads in 6 months and NJOY’s ads reached 3 million teens [these statistics come from the American Legacy Foundation report]. There is a legal principle that people are responsible for the natural and logical effects of what you do, and you know that you are reaching children.”

“I think we have seen this movie before,” he continued. “It is called big nicotine comes to children near you and you are using the same kinds of tactics and promotions and ads that were used by big tobacco and proved so effective.”

Holding up a picture of Robert Pattinson, the star of the popular Twilight films, vaping an NJOY, Blumenthal asked Weiss, “Do you deny he is designed to appeal to teens?”

“He’s a 28 year old adult smoker,” Weiss replied. “Are you saying if they are older than 18, they have no impact on people under 18?”

“Our target is to reach adult smokers,” said Weiss.

Senator Klobuchar took over the same line of questioning. “Have you gone to the Twilight movies, Mr. Weiss? I’ve been to those movies with my daughter, who is 16, and I can tell you, in those theaters, the people in there are kids…[Pattinson] is an adult smoker that appears in movies that appeal to kids. That’s what matters to me.”

Klobuchar continued, “I’ve got to tell you that most people over fifty are not going to know Robert Pattinson. Justin Bieber is over 18, someone put him out there, I don’t think anyone is going to think [he is being] marketed to adults. This is my exhibit D, that heavy duty marketing [efforts] go on to youth.”

Another tense moment occurred between Senator Barbara Boxer from California, who grilled Weiss and Healy about flavored e-cigarettes.

Weiss and Healy both contended that having different flavors available appeals to adults, too. Some Senators referred to a website sponsored by blu’s parent company, Lorillard, stating that flavors like “cherry” and “vanilla” make children vulnerable to electronic cigarettes. Healy responded that the average age of a consumer using blu’s cherry flavor is in the high 40s. The average overall consumer of blu eCigs is 51, said Healy.

Responding to questions from Senator Boxer (D-California) about the flavors NJOY plans to introduce, Weiss made a slip, saying “for adults, we have single malt scotch.”

“Adult flavors?” said Boxer. “As opposed to those for children.” Weiss continued nervously, attempting to remember the new flavors off the top of his head: “In addition, there’s vanilla bean, there’s also peach tea, there’s also, um…”

At the end of her time to question, Boxer said: “Mr. Healy and Mr. Weiss, you can con yourself. But we don’t know if this product gets people off cigarettes yet, so don’t think you are doing some great mission. Don’t say you care about kids,” said Senator Boxer. “Don’t be a part of this, because you’ll regret it.”

But the harshest words came from Senator Jay Rockefeller (D- West Virginia), who said to the executives: “I’m ashamed of you. I don’t know how you go to sleep at night. I don’t know what gets you to work in the morning except the color green of dollars. You are what is wrong with this country.”

Determinants and prevalence of e-cigarette use throughout the European Union

http://tobaccocontrol.bmj.com/content/early/2014/04/30/tobaccocontrol-2013-051394

Determinants and prevalence of e-cigarette use throughout the European Union: a secondary analysis of 26 566 youth and adults from 27 Countries

Abstract
Objective This study assessed the prevalence and determinants of e-cigarette use among persons aged ≥15 years in 27 European Union (EU) member countries during 2012.

Methods The 2012 Eurobarometer 385 (77.1) survey was analysed for n=26 566 respondents. Knowledge, perception of harm, and determinants of e-cigarettes use were assessed, while separate regression analyses among current (n=7352) and former cigarette smokers (n=5782) were performed. National estimates of the number of e-cigarette users were also extrapolated.

Results 20.3% of current smokers, 4.7% of ex-smokers, and 1.2% of never cigarette smokers in the EU reported having ever used an e-cigarette (overall approximately 29.3 million adults). Among smokers, ever e-cigarette use was more likely among 15–24-year-olds (aOR 3.13, 95% CI 2.22 to 4.54) and 25–39-year-olds (aOR 2.00, 95% CI 1.47 to 2.78) in comparison to older smokers, and among those who smoked 6–10 cigarettes/day (aOR 1.53, 95% CI 1.10 to 2.13) or 11–20 cigarettes/day (aOR 2.07, 95% CI 1.52 to 2.81) in comparison to very light smokers (≤5 cigarettes/day). Moreover, e-cigarette use was more likely among smokers who had made a past year quit attempt (aOR 2.08, 95% CI 1.67 to 2.58). E-cigarette use among ex-smokers was associated only with the respondents’ age, with younger ex-smokers being more likely to have ever used an e-cigarette.

Conclusions A substantial number of EU adults have ever used e-cigarettes. Ever users were more likely to be younger, current smokers, or past-year quit attempters. These findings underscore the need to evaluate the potential long term impact of e-cigarette use on consumer health, cessation and nicotine addiction and formulate a European framework for e-cigarette regulation within the revised EU Tobacco Product Directive.

E-Cigarettes and the Future of Tobacco Control

Download (PDF, 91KB)

Determinants and prevalence of e-cigarette use throughout the European Union

Determinants and prevalence of e-cigarette use throughout the European Union: a secondary analysis of 26 566 youth and adults from 27 Countries

It is noteworthy to report that, based on the above percentages, an extrapolated 3.9 million former smokers and 2.3 million never smokers in the EU reported in 2012 that they had ever used e-cigarettes.

The perception of harm among smokers also significantly varied throughout the EU, with overall 40.6% (38.8% to 42.3%) of smokers reporting e-cigarettes as not harmful, 28.5% (26.9% to 30.1%) as harmful, while 30.9% (29.3% to 32.6%) reported that they did not know if they were or were not harmful.

Multivariate logistic regression analyses performed among all respondents of the 2012 Eurobarometer 385 survey (smokers, ex-smokers, and never smokers, n=26 566), indicated that current smoking of combustible tobacco products was the strongest predictor of ever e-cigarette use (adjusted OR (aOR) 10.63, 95% CI 8.72 to 12.95) (table 2). Participants’ age was a significant determinant of e-cigarette use: younger respondents aged between 15–24 years were 3.3 (95% CI 2.50 to 4.55) times more likely to have used an e-cigarette, those aged 25–39 years were 1.89 times more likely (95% CI 1.43 to 2.50), = it is important to assess the potential harm versus benefits. In light of the new European TPD—which now includes ecigarettes and will provide the regulatory framework for their use within the EU—further research is needed to assess the long term impact of e-cigarette use on consumer health, smoking cessation, and nicotine addiction.

Download (PDF, 293KB)

Public health response to Electronic Nicotine Delivery Systems (ENDS) Letter

Download (PDF, 177KB)

Standardised Packaging Bill 2014

Download (DOCX, 42KB)