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December 3rd, 2015:

iFuse to Join BAT’s Vype, Voke

http://www.cspnet.com/category-news/tobacco/articles/ifuse-join-bats-vype-voke

LONDON — British American Tobacco (BAT) plans to test a hybrid product that combines tobacco and electronic-cigarette technology in a European market, a senior executive recently told Reuters.

The product, called iFuse, will use elements of the company’s Kent brand, and it will be sold in a market where Kent cigarettes are popular. Executives declined to say precisely which market that will be.

The test is the latest in a line of cigarette alternatives sold by big tobacco firms like BAT, Philip Morris International, Imperial Tobacco and Japan Tobacco, who are jostling for position in an emerging category and trying to offset the decline of the tobacco market, said the report.

Like an e-cigarette, the iFuse heats nicotine-laced liquid into an inhalable vapor, but the vapor passes through a bit of tobacco near the tip that imparts flavor, Kingsley Wheaton, BAT’s managing director of next-generation products, told the news agency.

Philip Morris also has a tobacco-based vapor product that uses what it calls Marlboro Heatsticks.

The companies say the products avoid the burning that causes the release of chemicals.

Relative to BAT’s other tobacco-only vapor product, the iFuse is “simpler to use, more compact, more convenient, neater, cleaner and probably attracts a lower excise position,” Wheaton said.

Excise tax is often calculated using the amount of tobacco.

BAT’s other cigarette alternatives include the Vype e-cigarette and the Voke nicotine inhaler, which is licensed as a stop-smoking product.

Scant evidence EU tobacco deal curbed smuggling

https://euobserver.com/investigations/131266

Cigarettes seized at the Ukraine-Polish border in October 2011. EU member states reported that they seized 4.5 billion cigarettes in 2005, and 3.1 billion in 2013. (Photo: European Commission)

Cigarettes seized at the Ukraine-Polish border in October 2011. EU member states reported that they seized 4.5 billion cigarettes in 2005, and 3.1 billion in 2013. (Photo: European Commission)

Michaele Schreyer was in the last months of her mandate as European commissioner for budgetary affairs when in July 2004 the European Union signed an agreement with tobacco multinational Philip Morris International (PMI).

She did not mince words when she assessed the deal.

“We have concluded an agreement with PMI, which is quite unique in its scope and I am not afraid to use the term ‘landmark’ agreement here,” she said. “We have built an efficient system to fight against future cigarette smuggling and counterfeiting.”

Fast forward eleven years – and four budget commissioners later – and the agreement with PMI is nearing its expiration date. According to current EU budget chief Kristalina Georgieva, the commission is almost done with its assessment of the agreement.

So has cigarette smuggling and counterfeiting dropped in the past eleven years?

In May 2015, Georgieva came to the plenary session in Strasbourg at the request of several MEPs, to talk about the PMI deal.

“There are some facts that are very clear,” she noted.

“The main objective of the PMI agreement to reduce the presence of smuggled PMI products on the EU black market has been achieved. Between 2006 and 2014 the volume of illegal PMI products seized by member states under the agreement has dropped by 85 percent. That substantially exceeds the overall downward trend in seizures. This drop applies equally to both genuine and counterfeit PMI products.”

According to the Commission, EU member states reported that they seized 4.5 billion cigarettes in 2005, and 3.1 billion in 2013.

In parallel, the occurrence of PMI brands among the seized cigarettes has also dropped.

In a 2013 report to the parliament and national capitals, the commission said that the agreement with PMI, and three others like it with the other big tobacco companies, “have clearly led to a significant reduction in the presence of these companies’ products on the illicit market”.

In 2011, the share of seized cigarettes with “other brands”, i.e. brands from companies that don’t have an agreement with the EU, reached 58 percent.

But a decreased share of PMI’s cigarettes in seizures does not automatically mean an absolute decrease in smuggled goods, just as that a rise in police reports does not directly prove an increase in crime.

The trouble with crime data

The honest answer is of course: we don’t know for sure. By their very nature, illegal activities are difficult to quantify.

In any case, there are several factors that complicate matters.

Member states have only begun to report their seizures of smuggled cigarettes systematically in 2005, which means there is no accurate picture of the situation before the agreement went into force.

Also, as seizures were decreasing in the past decade, the estimates of the overall size of illicit trade in cigarettes went up.

The commission said in the same 2013 document in which it signalled a downward trend in seizures that consumption of illicit cigarettes has increased by 30 percent in six years. The EU executive cited a study by audit company KPMG, which had said that 8.4 percent of all cigarettes smoked by Europeans in 2007 were illegal, while in 2012 that share was 11.1 percent.

KPMG has written annual reports on the state of illicit tobacco trade in Europe, commissioned by PMI, but they are not completely uncontroversial.

This website was granted access via a freedom of information request to the minutes of a 2 July, 2013 meeting with representatives of PMI, KPMG, the EU and 23 of its member states in Brussels.

The minutes noted that that year’s KPMG report “were released by PMI without consultation with member states”, which one ber state called “very embarrassing”.

Another member state (MS) pointed out a “significant difference between the figures from the KPMG report and MS figures”.

A representative of Olaf, the EU’s agency that deals with tobacco fraud, said that: “the difference between the OLAF/MS and KPMG figures is huge, it represents a gap of 25 per cent. OLAF/MS figures show a decrease of 12% (around 3,8 billion cigarettes seized) while the KMPG points out the increase of 11%.”

At a similar meeting a year earlier, one country “congratulated KPMG for the excellent analytical and statistical work” but also noted “that the statistics provided by KPMG are the only tool member states have at their disposal to check the global trends and figures”.

Lack of independent data

And this is problematic, say a group of researchers in an article published earlier this year in the peer-reviewed medical journal Tobacco Control. The article tried to assess the impact of the PMI agreement and three other similar deals that were struck with other tobacco giants.

“Full evaluation of the agreements is almost impossible, as there are no independent publicly available data on the origins and brands of illicit tobacco products and the size of the illicit market in the EU … The only publicly available data on the EU illicit cigarette trade over time are data produced by KPMG for the tobacco industry”, said the article.

Two years earlier, another article was published in Tobacco Control, specifically about the KPMG reports.

The researchers noted there was “lack of transparency, inadequacy of methodological details and subsequent quality of the data inputted to the model, the over-reliance on PMI data, and the lack of external validation.”

Wrong incentive?

Another problem when evaluating whether the agreements have reduced PMI’s share of illicit cigarettes traded, is that PMI itself gets to say whether a seized cigarette was a genuine or counterfeit.

Under the agreement, PMI has to make a payment that is equivalent to 100 percent of the evaded taxes when a batch of 50,000 or more smuggled cigarettes are seized that carry its brand. However, if it is determined they are fake, PMI does not have to pay. The same goes for the other three manufacturers.

As of June 2015, all four manufacturers have paid €88 million in seizure payments, and €1.3 billion in annual payments, as stipulated by the agreements.

The Tobacco Control authors, who want the EU to end the tobacco agreements, criticized the fact that PMI is allowed to say whether seized cigarettes are fake or not, because it has an interest in the outcome.

“The intention of the seizure-based payments to deter the tobacco industry from further involvement in the illicit cigarette trade has failed because the agreements contain too many loopholes that provide [tobacco multinationals] with both the incentive and opportunity to classify seized cigarettes as counterfeit”.

While the EU and its member states have the option to do random checks and test the seized cigarettes which PMI claimed to be counterfeit in an independent laboratory, there has never been a dispute that triggered such an investigation.

A commission document sent to MEPs in the spring said that one “(large) member state has over a certain period of time verified 123 determinations ‘genuine or counterfeit’ made by manufacturers, and not found any error”.

The text also notes that EU anti-fraud agency Olaf has requested an independent laboratory in Scotland to “analyse more than 300 samples of seized cigarettes. (….) Of these random checks, none has revealed a false determination.”

Lost taxes

Meanwhile, the €88 million in recovered seizure payments is nowhere near enough to make up for the tax revenue that is reportedly lost due to smuggling.

The commission says that every year the EU and member states budgets lose €10 billion in potential tax revenue.

Curiously, it has used the same figure since at least July 2010.

Green MEP Bart Staes recently noted in a parliament debate with Georgieva that despite the agreement with PMI and other tobacco companies, the financial loss is steady at €10 billion.

“That figure is apparently not coming down, because I have heard that figure of €10 billion for years,” said Staes.

The 2013 commission communication explained that the estimate of €10 billion annual loss “is based on seizures reported by the member states which amounted to 4.5 – 4.6 billion cigarettes per year between 2005 and 2011”.

But since the volume of seized cigarettes has slowly been going down, to 3.1 billion in 2013, it may be time for the commission to update the figure, before deciding on a possible renewal of the agreement with PMI.

Potentially dangerous molecules detected in e-cigarette aerosols

http://medicalxpress.com/news/2015-12-potentially-dangerous-molecules-e-cigarette-aerosols.html

Electronic cigarettes produce highly-reactive free radicals—molecules associated with cell damage and cancer—and may pose a health risk to users, according to researchers at Penn State College of Medicine.

The use of e-cigarettes is on the rise. According to the Centers for Disease Control and Prevention, more than 20 percent of young adults have tried e-cigarettes, and current smokers and recent former smokers are most likely to have used them.

E-cigarettes deliver nicotine in water vapor instead of by burning tobacco. The battery-operated devices have been marketed as an alternative to traditional cigarettes.

Despite their growing popularity, very little is known about toxic substances produced by e-cigarettes and their health effects.

“There’s a perception that e-cigarettes are healthier than regular cigarettes, or at least not as harmful as regular cigarettes,” said John P. Richie Jr., professor of public health sciences and pharmacology. “While e-cigarette vapor does not contain many of the toxic substances that are known to be present in cigarette smoke, it’s still important for us to figure out and to minimize the potential dangers that are associated with e-cigarettes.”

Previous studies have found low levels of aldehydes, chemical compounds that can cause oxidative stress and cell damage, in e-cigarette “smoke.” But until now, no one has looked for free radicals, the main source of oxidative stress from cigarette smoke. Highly reactive free radicals are a leading culprit in smoking-related cancer, cardiovascular disease and chronic obstructive pulmonary disease.

Instead of smoke, e-cigarettes produce aerosols, tiny liquid particles suspended in a puff of air. The researchers measured free radicals in e-cigarette aerosols.

They found that e-cigarettes produce high levels of highly reactive free radicals that fall in the range of 1,000- to 100-times less than levels in regular cigarettes.

“This is the first study that demonstrates the fact that we have these highly reactive agents in e-cigarette aerosols,” Richie said. Results were published in the journal Chemical Research in Toxicology.

“The levels of radicals that we’re seeing are more than what you might get from a heavily air-polluted area but less than what you might find in cigarette smoke,” Richie said. The radicals are produced when the device’s heating coil heats the nicotine solution to very high temperatures.

Further research is needed to determine the health effects of highly reactive free radicals from e-cigarettes.

“This is the first step,” Richie said. “The identification of these radicals in the aerosols means that we can’t just say e-cigarettes are safe because they don’t contain tobacco. They are potentially harmful. Now we have to find out what the harmful effects are.”

Richie is currently conducting studies to carefully measure total numbers of free radicals in e-cigarette aerosols and to identify their chemical structures.

“That will help us interpret the data better to know how dangerous they are,” he said.

Tobacco Taxation Amended

The NEC has announced endorsing Taxation Amendment to Tobacco Excise and IRC housekeeping amendments.

Prime Minister, Peter O’Neill, said Cabinet approved a retrospective amendment to the Excise Tariff Act 1956 to correct tobacco excise base rates using the 5% biannual indexation for tobacco products.

He said this will correct unintended swap in the Tariff Item 2402.20.10 and 2402.20.20 descriptions and rates, which had commenced on December 1, 2014.

PM O’Neill said Cabinet approved an amendment to the Customs Tariff rate to ensure Customs Tariff item codes and descriptions are consistent for ease of administration.

O’Neill added that Cabinet approved the minor housekeeping amendments to the Income Tax Act 1959 and the Income Tax Regulation 1959 to correct typographical errors, out dated referencing and duplications to clarify law and ease management.

NEC also approved the amendment to the Goods and Services Tax Act 2003 to correct unnecessary duplication of Inland GST banking and distribution process to clarify law for ease of administration.

According to O’Neill, NEC has directed the First Legislative Counsel to draft the required amendments to implement these measures.

E-cigarette vapor contains molecules with potential to cause cancer – study

https://www.rt.com/news/324652-e-cigarettes-vapor-cancer/

Electronic cigarettes, until now generally believed to be less damaging to health than traditional cigarettes, produce dangerous ‘free radical’ molecules linked to smoking-related diseases such as cancer, a recent study claims.

Scientists from the Pennsylvania State University claim that e-cigarettes – marketed as a healthier alternative to traditional smoking as well as a way for smokers to gradually kick their habit – actually pose a potentially significant threat to human health.

Unlike traditional cigarettes, e-cigs deliver nicotine via aerosols or vapor – tiny liquid particles suspended in the air – and not by burning tobacco and producing smoke. Therefore, they are considered to be free from many dangerous substances associated with traditional smoking.

Previous studies have shown that the vapor of e-cigarettes contains low levels of aldehydes – chemical compounds that are responsible for cell damage resulting from traditional smoking. However, no-one has paid attention to the ‘free radicals’ that can also potentially be produced by e-cigs – even though these are considered to be the primary reason for smoking-related cancer, cardiovascular disease and chronic obstructive pulmonary disease.

“There’s a perception that e-cigarettes are healthier than regular cigarettes, or at least not as harmful as regular cigarettes,” said John P. Richie Jr., professor of public health sciences and pharmacology and one of the leading scientists of the research, according to the university’s press-release published on Wednesday.

“While e-cigarette vapor does not contain many of the toxic substances that are known to be present in cigarette smoke, it’s still important for us to figure out and to minimize the potential dangers that are associated with e-cigarettes,” he added, referring to the research group’s study focused on measuring free radicals in e-cigarette vapor.

The study has shown that electronic cigarettes do produce considerable levels of highly reactive free radicals capable of causing cancer and other diseases as well as damaging cells, although these levels are still 1000 to 100 times lower than those produced by regular cigarettes, as the scientists claim in the paper published in the journal Chemical Research in Toxicology.

According to the study’s findings, the dangerous molecules are a result of the e-cigarette’s heating coil boiling the nicotine-containing liquid to very high temperatures.

“This is the first study that demonstrates the fact that we have these highly reactive agents in e-cigarette aerosols,” Richie said, as quoted in the Pennsylvania State University press release.

“The levels of radicals that we’re seeing are more than what you might get from a heavily air-polluted area but less than what you might find in cigarette smoke,” he added.

The research team is now continuing its studies, trying to precisely measure the total number of free radicals in e-cigarette vapor as well as to identify their chemical structures.

“The identification of these radicals in the aerosols means that we can’t just say e-cigarettes are safe because they don’t contain tobacco. They are potentially harmful. Now we have to find out what the harmful effects are,” Richie commented on the ongoing research.

In the meantime, e-cigarettes are gaining ever-growing popularity due to both their “healthier” image and relatively little info on the potential risks of their use. According to the Centers for Disease Control and Prevention in the US, more than 20 percent of young people as well as most current and recent former smokers have tried them.

Tobacco sellers decry more curbs on their business

Macau’s sellers of cigarettes and cigars have expressed their opposition to a bill that would ban shops from displaying tobacco products or from offering facilities where prospective buyers can try tobacco products.

“Cigars and other tobacco products should to be displayed and presented to customers,” Pacific Cigar Co Ltd regional director Kenith Wong told reporters after he and other representatives of the tobacco trade attended a meeting of the Legislative Assembly standing committee that is considering the bill.

“The tasting room, as we call it, is a facility that is very important in the sales process,” Mr Wong said.

http://www.macaubusiness.com/news/tobacco-sellers-decry-more-curbs-on-their-business.html

The slow-burn, devastating impact of tobacco plain packs

http://theconversation.com/the-slow-burn-devastating-impact-of-tobacco-plain-packs-51727

It is three years since Australia fully implemented its historic tobacco plain packaging law. From December 1, 2012, all tobacco products have been required to be sold in the mandated standardised packs, which, with their large disturbing graphic health warnings, are anything but “plain”.

Ever since, there have been frenzied efforts by the tobacco industry and its ideological baggage carriers to discredit the policy as a failure.

The obvious subtext of this effort has been to megaphone a message to other governments that they should not contemplate introducing plain packaging because it has “failed”: smoking, it is claimed, has not fallen any faster in Australia after plain packaging that it was already falling before. All that has occurred, they argue, is that illicit trade has increased.

The supreme irony here is of course that if such criticism was correct, then to paraphrase Hamlet’s mother Gertrude, “The tobacco industry doth protest too much, methinks.” Why would the industry and its astro-turfed bloggers waste so much money and effort denigrating a policy which was having little or no impact?

Why take the Australian government to the High Court (and fail six to one) to try and block the law? Why invest in supporting minnow tobacco-growing states such as the Dominican Republic, Honduras and Cuba in their efforts to have the World Trade Organization rule against plain packaging?

Why not just ignore an ineffective policy instead of making it only too obvious to all by such actions that it is in fact a grave threat to your industry?

Two key assumptions have underscored efforts to discredit the impact of plain packaging. First, critics assume the impacts of the law should have been evident immediately as it was implemented: as one colleague put it recently “within ten seconds of the law passing”.

Second, they assume (but never actually state) that the impact of plain packaging on smoking by children (the principal target) and adults was supposedly going to be greater than anything we have previously observed in the entire history of tobacco control.

In 1999, the late Tony McMichael, professor of epidemiology at the Australian National University, published a classic paper called Prisoners of the Proximate where he wrote about the need to understand the determinants of population health in terms that extend beyond proximate single risk factors and influences.

In tobacco control, both proximal (discrete, recent and quick-acting) and distal (on-going, slow-burn) effects of policies and campaigns can occur. Price rises (and falls through discounting) can have both immediate and lasting effects, jolting smokers into sometimes unplanned quitting and also slowly percolating an unease about the costs of smoking that translate into quitting down the track.

Tobacco advertising bans are a good example of a policy that has such slow-burn effects across many years. Few if any quit smoking in direct response to tobacco advertising bans. They work instead by causing the next generations of kids to grow up in an environment devoid of massive promotional campaigns depicting smoking in positive ways.

I have often heard smokers say “plain packaging won’t make me quit smoking”. This is akin to the myopic self-awareness of those who swear “advertising (for any product) never influences me” while noting that it only influences the more impressionable.

Plain packs were unlikely to act suddenly in the way tax rises do, although the unavoidably huge graphic health warnings may well have acted like straws that broke the Camel’s back of worry about smoking. Their impact was far more likely to be of the slow-burn sort, where the constant reminder that tobacco, unique among all products, is the only consumer good treated this way by the law. It is exceptionally dangerous, with a recent estimate that two in every three long-term smokers will die from tobacco use.

In 1994 I wrote a now highly cited paper in the British Medical Journal which talked about the impossibility of “unravelling gossamer with boxing gloves” when it came to being certain about precisely why smokers quit. I took a day in the life of a smoker who quit, and pointed to the myriad of influences both distal and proximal that coalesce to finally stimulate a smoker to quit.

While a smoker might nominate a particular policy, conversation with a doctor or anti-smoking campaign as being “the reason” they quit, much of what went on before provides the broad shoulders of concern that carry the final attribution. There are synergies between all these factors and the demand to separate them all is like the demand to unscramble an omelette.

So what has happened to smoking in Australia since plain packs?

Data released this month from a national schools survey involving more than 23,000 high school children found smoking rates were the lowest ever recorded since the studies first commenced in 1984 (see graph). This momentum is starving the tobacco industry of new smokers, which is one important reason why all tobacco companies are now busily acquiring e-cigarette brands.

Proportion of 12- to 15-year-olds who smoke, 1984 to 2014

image-20151203-22439-ofg596

Trends in proportion of current (smoked in past seven days) and committed smokers (smoked on three or more of the past seven days) among 12 to 15-year old students, Australia, 1984-2014.

With adults, National Accounts data just released show that for the 11 quarter-year periods since March 2013, consumption of tobacco products in aggregate fell an unprecedented 20.8%, while the previous 11 quarters it fell 15.7% and in the 11 before that, only 2.2%.

The latest available data on adult smoking prevalence we have is from 2013 and show just 12.8% of Australians over 14 smoked on a daily basis. This is the lowest on record and again, the biggest percentage falls experienced since the surveys commenced (see graph).

Reductions in daily smoking among Australians aged over 14, 1991 to 2013

AIHW National Drug Strategy Household Survey 2013: preliminary findings. 2014 Author-sourced.

AIHW National Drug Strategy Household Survey 2013: preliminary findings. 2014 Author-sourced.

Meanwhile, the tobacco industry plods along funding heavily lambasted studies which purport to show none of this is happening.

The argument that plain packaging would cause illicit trade to boom was made with monotonous regularity by Big Tobacco between April 2010 when plain packaging was announced and its December 2012 implementation. When the industry lost its case in the High Court, the argument was quietly dropped.

Today, the industry explains illicit trade entirely by the heinous government tobacco tax rises cloaked in a sanctimonious rhetoric of speaking up for poor smokers and corporate citizen concern about tax avoidance bleeding Treasury. In all this it fails to mention that it has long used tax rises as air cover to quietly raise its own profit margins.

As I wrote recently in The Conversation:

From August 2011 to February 2013, while excise duty rose 24¢ for a pack of 25, the tobacco companies’ portion of the cigarette price (which excludes excise and GST), jumped A$1.75 to A$7.10. While excise had risen 2.8% over the period, the average net price had risen 27%. Philip Morris’ budget brand Choice 25s rose A$1.80 in this period, with only 41¢ of this being from excise and GST.

Ireland, the United Kingdom and France have already passed laws to introduce plain packs. Norway and Canada will soon, and New Zealand, Chile, Turkey, South Africa and Brazil have also made high-level noises about joining in too. The world has a lot to thank Rudd and Gillard governments (and particularly Health Minister Nicola Roxon) for taking this initiative, and the subsequent Coalition government for continuing to support it strongly as it continues to come under attack from those it has and will continue to hurt.

Update: Dec 5: There are now 25 nations which have either passed plain packaging legislation, have it in train, or are planning to introduce it. See https://twitter.com/SimonChapman6/status/672888858871095296

Infographic: how big is Europe’s potential e-cigarette market?

Download (PDF, 1.32MB)