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July 21st, 2016:

Global standards for vaping products essential to promote innovation

R&D at British American Tobacco

Against a backdrop of a growing number of e-cigarette users globally, British American Tobacco (BAT) is leading efforts to develop and harmonise standards around vaping products to further reassure consumers of these products potential in reducing the harm from smoking.

Marina Trani, Head of R&D of Nicoventures (a wholly owned subsidiary of British American Tobacco) will tell delegates at the EuroScience Open Forum 2016 on July 26th that standards need to be harmonised in order to promote innovation. ‘Different rules in different jurisdictions make it overly burdensome and expensive, especially for smaller companies. It stifles growth and innovation, which in turn could stifle the potential these products have for reducing the harm of smoking,’ she said.

The EU and the US, for example, are worlds apart in terms of how they regulate e-cigarettes. Draft regulations in the US (to be enacted in August) will require pre-approval before any change is made to a vaping product. Whereas, the EU Tobacco Products Directive requires a less restrictive six month prior notification (rather than approval) for ‘substantial modification.’ There is a growing body of evidence that e-cigarettes are substantially safer than cigarettes. Kevin Fenton, Public Health England’s Director of Health and Wellbeing, recently said, ‘The wider body of evidence consistently finds that e-cigarettes are less harmful than smoking.’

British American Tobacco was the first tobacco company to launch an e-cigarette in 2013 and has been proactive in both developing the first voluntary product standard with the British Standards Institute (BSI), advocating for more harmonised standards and is currently actively contributing to the European standards development work.

BAT has taken a particular leadership position in toxicological risk assessment through the publication of its 2015 best practice guide for how to comply with that aspect of the BSI guidelines. Dr Sandra Costigan, Principal Toxicologist at Nicoventures, explains how the guide helps to safety assess flavours for inhalation rather than ingestion. Costigan says ‘safe to eat is not the same as safe to inhale’ .The guide sets out a scientific rationale that will help determine if particular flavours can be used safely.

As Trani will reinforce at the ESOF, the vaping industry should continue on a journey towards standards that can protect consumers, increase understanding of next generation products, are clear and harmonized globally while not inhibiting innovation.

Advocates gets tobacco industry rep. removed as speaker at UN meeting

Quick action by tobacco control advocates resulted in a representative from Japan Tobacco International (JTI) being dropped as a speaker at a meeting on investment policy hosted by the United Conference on Trade and Development (UNCTAD).

Mr Ulle Geir, JTI director of international trade, was to speak at UNCTAD’s biennial investment forum in Kenya on 19 July. However, as advocates pointed out in email messages to UNCTAD days before the meeting, it is highly inappropriate for the tobacco industry to speak at events focused on policy-making, for various reasons.

As explained in a letter to UNCTAD signed by two dozen FCA members, tobacco use is a barrier to development, costing millions of lives and billions of dollars a year.

Strengthening implementation of the FCTC is one of the ‘means of implementation targets’ (target 3a) included in the United Nations Sustainable Development Goals (SDGs) that were adopted in September 2015.

In 2011, the UN General Assembly recognised “the fundamental conflict of interest between the tobacco industry and public health”. This was a clear reference, by world leaders, to FCTC rules on protecting policy-making from tobacco industry interference.

‘Fundamental, irreconcilable conflict’

Article 5.3 of the FCTC, requires governments to protect “public health policies with respect to tobacco control” from the “commercial and other vested interests of the tobacco industry”. Principle 1 of Article 5.3 guidelines, unanimously adopted in 2008, states: “There is a fundamental and irreconcilable conflict between the tobacco industry’s interests and public health policy interests.”

The UN Task Force on NCDs, of which UNCTAD is a member, is currently developing a model policy for United Nations organisations on preventing tobacco industry interference. The policy is expected to contain measures based on FCTC Article 5.3 and its guidelines.

In its letter, FCA called on UNCTAD, as well as other UN agencies and bodies, to help develop that policy, and to adopt it without delay. It also sought confirmation that, until such a policy is adopted, UNCTAD will quickly put in place, structures and procedures to prevent any tobacco industry employee or representative from acting as a speaker or participant at any event organized by UNCTAD.

Think e-cigs are safe for kids? You’ll think twice after reading this

A study found 75 percent of flavored e-cigarettes contain a chemical linked to severe respiratory disease

The teenage brain is particularly vulnerable to addiction

“Popcorn lung’’ can develop

Electronic cigarettes, or e-cigarettes, have become so popular that they surpassed conventional cigarettes as the most commonly used tobacco product among youth in 2014, according to the Centers for Disease Control and Prevention.

E-cigarette use among youth has soared — from 1.5 percent in 2011 to 13.4 percent in 2014 among high school students, and from 0.6 percent in 2011 to 3.9 percent in 2014 among middle school students, according to the CDC.

E-cigarettes, battery-powered devices that provide doses of nicotine and other additives to the user in an aerosol, are often falsely viewed as a harmless alternative to conventional cigarettes because e-cigarettes do not contain tar, which can lead to tobacco-related diseases.

But, there are real dangers for users of e-cigarettes, especially for youth, medical experts say.

An adolescent brain is particularly vulnerable to addiction because it is still developing, said Dr. Judy Schaechter, chair of the department of pediatrics at UHealth — University of Miami Health System. Nicotine addiction can then become more severe and difficult to break.

Nicotine addiction can also become a gateway to conventional cigarettes and other substances, said Dr. Loretta Duggan, an adolescent medicine fellow at Nicklaus Children’s Hospital. A person with a family history of addiction or an addictive personality can also be very vulnerable.

“It can make it easier to lead to illicit drug use,” Duggan said.

Nicotine can increase heart rate and blood pressure as well as contribute to cardiovascular and heart disease, Duggan said. E-cigarettes can cause strokes and cancer because nicotine can negatively affect blood vessels.

“Even though e-cigarettes seem harmless, a real risk exists,” Duggan said.

There is very little research about other effects that e-cigarettes, which include other additives, can have on the body, Schaechter said. But, e-cigarettes can have a negative effect on the brain, causing inflammation to the lungs and developing tissue.

Schaechter noted reports of e-cigarette users suffering from “popcorn lung” or bronchiolitis obliterans. That is an irreversible life-threatening disease that causes scarring within small air sacs in the lungs, resulting in a severe cough and shortness of breath that gets progressively worse over time.

According to a study released by the Harvard School of Public Health, 75 percent of flavored e-cigarettes and their refill liquids were found to contain diacetyl, a flavoring chemical linked to cases of severe respiratory disease such as “popcorn lung.”

E-cigarettes are often attractive to adolescents because of their kid-friendly flavors, packaging and advertisements.

According to a CDC study released in April, there is a link between exposure to e-cigarette advertisements and the use of e-cigarettes by middle and high school students. Spending on e-cigarette advertising rose from $6.4 million in 2011 to an estimated $115 million in 2014.

The high rate of e-cigarette use among adolescents suggests that adolescents who would not have otherwise used tobacco products are picking up the habit, according to a study released this summer by the American Academy of Pediatrics.

Parents can guard against these dangers. Talk to children as young as 6, before they are influenced by their peers, Duggan said.

Parents should also not indulge in e-cigarette use, Schaechter said.

“We know children of smokers are more likely to smoke,” Schaechter said. “If parents don’t want their children to pick up addictive habits, they shouldn’t do it.”

Also, monitor their social media, TV and cellphone usage, where adolescents can view e-cigarette advertisements.

The Food and Drug Administration (FDA) issued new rules in May that for the first time extend federal regulatory authority to e-cigarettes, banning their sale to anyone under 18 and requiring that adults under the age of 26 show a photo identification to buy them.

The new rules also require manufacturers to register with the FDA, disclose detailed reports of their products’ ingredients and obtain permission to sell their products.

“We can work with teens to break addiction, unlike with our parents and grandparents, who didn’t have the type of knowledge that we have today,” Duggan said.


MPAA: Cigarette ban in movies in an infringement of free speech

(WVLT) — According to the Hollywood Reporter, the Motion Picture Association of America is reponding to a lawsuit, saying the restriction of tobacco imagery in movies is an infringement on free speech.

You can read the original report on

The plaintiffs want any movie with tobacco imagery to be rated R.

According to the CDC, the more smoking young people see on the screen, the more likely they are to start smoking themselves. The CDC cited a Surgeon General’s Report that showed an industry-wide standard of rating movies that show tobacco use as R-rated could result in reductions in youth smoking. It could reduce the number of teen smokers by nearly one in five and prevent 1 million deaths from smoking among children alive today.

You can read the full CDC report on

What Makes Altria A Great Investment?


Tobacco has traditionally been one of the best industries to invest in, but will it always be?

Altria’s domestic focus keeps it insulated from currency swings.

It also protects it from an even more insidious threat.

Diversification becomes even stronger if BUD deal closes.

Shares are likely overvalued, what to do?

Bryan Burrough and John Helyar’s book about the leveraged buyout of RJR Nabisco, Barbarians at the Gate, is one of my favorite books. There’s a scene where then CEO of Salomon Brothers, John Gutfreund, asks Warren Buffett for some advice on whether or not he should pursue a bid for the company. Buffett responded with the following wisdom:

I’ll tell you why I like the cigarette business… It costs a penny to make. Sell it for a dollar. It’s addictive. And there’s fantastic brand loyalty.”

This probably holds true today, but things change with time, and time could be running out for “Big Tobacco”.

About that brand loyalty…

It’s hard to be loyal to a brand when a government squashes said brand. The Australian government has already instituted “plain packaging” laws, therefore destroying any tobacco company’s ability to differentiate their product. If this was a totally global practice, it would likely be hard to profitably compete in an industry defined by monopolistic competition – where brands and differentiation are the biggest competitive advantages.

Philip Morris International (NYSE:PM), which was spun-off from Altria (NYSE:MO) along with (ironically) some former Nabisco brands, is facing major headwinds from currency fluctuations in the short-term. These headwinds will likely abate at some point, but I think plain packaging is a much more dire threat in the long-term. The plain packaging movement seems to be spreading even in Europe, and apparently Latin America wants to join in, too. The trend is globalizing, and I think this threat should be taken very seriously. Without branding, why wouldn’t tobacco users just buy the cheapest brand?

Movie Industry in First Amendment Clash With Anti-Smoking Activists

A consumer-fraud complaint targeting the Hollywood film industry is pitting anti-smoking activist fears against free speech concerns.

The defendants in the case are the Motion Picture Association of America, its studio members and theater owners who in court papers say they’re defending against a dangerous assault on the First Amendment.

But the plaintiffs’ lawyers seeking to turn the lawsuit into a mega-class action say it’s not the speech that’s at stake, but the lives of kids.

The main plaintiff is a 52-year-old California man named Timothy Forsyth, a father of two middle-school aged kids who alleges that the film industry is misleading and literally killing young consumers by affixing PG-13 ratings on films featuring “tobacco imagery.”

Movies in which characters smoke are dangerous to children who are “particularly vulnerable to various forms of marketing and advertising,” the complaint filed by his lawyers alleges. And parents who trust the movie-rating system to warn them about inappropriate content are unwittingly exposing their kids to images that will hook them on cigarettes and set them on a path toward lung cancer and heart disease. And by failing to disclose that youth-rated films contain tobacco imagery and by not giving those movies a more restrictive R rating, the film industry is tricking parents into buying their kids tickets to films, the lawsuit alleges.

In court papers, the film industry is attacking the lawsuit as a “misguided attempt to upend basic tort principles and core First Amendment protections to force…the movie ratings body… to change the opinions it expresses through its movie ratings system.”

The plaintiffs spotlight 10 big-budget Hollywood films released between 2012 and 2015 that are rated PG-13 and contain “tobacco imagery.” Among them are “Dumb And Dumber To”, “Iron Man 3″, “Men In Black 3″, “Transformers: Age of Extinction” and “The Hobbit” franchise.

It’s not exactly clear how tobacco imagery is defined, but it seems to encompass more than cigarette smoking but could include characters smoking pipes (as the case with the wizard Gandalf in the Hobbit) or just images of cigarettes.

The MPAA is pushing back hard. It’s invoking powerful First Amendment protections under California’s “anti-SLAPP” statute. The law, one of the most expansive of its kind in the country, aims to discourage costly lawsuits of dubious merit that threaten legitimate freedom of expression. It shifts the burden of proof to the defendant’s advantage, offers a stronger shield against plaintiff discovery demands and gives the party getting sued a way to toss out a lawsuit at an earlier stage.

The plaintiffs claim the MPAA’s rating system isn’t a protected expression of opinion but a form of commercial speech. As such, the First Amendment protections are much weaker, they argue. Their commercial speech argument hinges on the fact that the MPAA has registered its ratings as trademarks.

In a brief filed this month, the plaintiffs wrote:

Defendants are free to express their opinions in newspapers and books and press releases about the appropriate way to rate films with tobacco imagery, and the expression of their opinions in that form is protected by core First Amendment principles. However, when defendants make false and misleading representations on product labels or advertisements for the purpose of selling products, they are engaged in quintessential commercial speech, and such commercial speech is not protected by the First Amendment.

Beyond its First Amendment defense, the MPAA balks at the notion that it’s the only public source of information available to parents about the content of movies. It notes that they can go online to anti-smoking websites like Smoke Free Movies to see if a film features smoking.

The film association says smoking imagery, particularly when it glamorizes smoking, can be factored into ratings. The MPAA’s movie ratings body, though, has rejected demands that it slap a mandatory R rating on all motion pictures with any smoking.

Overall, though, the percentage of youth-rated movies that are “smoke free” has plummeted in recent years, according to data posted by the Centers for Disease Control and Prevention. And smoking levels are also at record lows.

The Significance Of Uruguay’s Win Over Philip Morris International

The tobacco industry’s global efforts to use bilateral and multilateral agreements to challenge the spread of tobacco control measures such as trademark-minimising plain packages were dealt a significant blow last week when the World Bank dispute settlement body dismissed a case brought by Philip Morris against the government of Uruguay.

The decision is seen a landmark for those who view the company as using test cases to continually challenge and delay public health protection measures and discourage other countries, particularly those with fewer resources, from strengthening their health regulations. Additionally, the case reasserted that trademarks are subject to government regulations and also illustrated the role that international organisations and actors can play in support of national governments defending their health measures.

Facts & Arguments

Philip Morris initiated legal proceedings through its Swiss subsidiary against Uruguay at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) early in 2010. Among many firsts, this was the first time a tobacco group challenged a state in front of an international court and the first investment arbitration concerning tobacco control.

ICSID aims to support voluntary conciliation and arbitration of international investment disputes upon consent of both the investor and state. Once such consent is given, it cannot be withdrawn unilaterally and it becomes a binding undertaking. Independent arbitrators and conciliators appointed to each case hear the evidence and determine the outcome of the dispute.

Philip Morris claimed that the health measures imposed by the Uruguayan Public Health Ministry infringed on its intellectual property rights and breached Uruguay’s obligation under the bilateral investment treaty (BIT) between itself and Switzerland.

The case and related documents can be found here.

Two specific measures were contested. The first was the Single Presentation Requirement introduced by the Uruguayan Public Health Ministry in 2008, where tobacco manufacturers could no longer sell multiple varieties of a brand. In having to pull 7 out of its 12 products, Philip Morris alleged that only being able to market one variety substantially affected its company value.

The second measure concerned the so-called “80/80 Regulation.” Under a presidential decree issued in 2009, the graphic health warnings on cigarette packages should cover 80 percent instead of 50 percent, of the packaging, leaving only 20 percent to the tobacco companies’ trademarks and other information.

Uruguay was the first to go beyond the 50 percent surface requirement, but since the proceedings began, 58 other countries have also increased the requirement for the size of graphics. Nepal even calling for 90 percent of a cigarette package to be covered. The claimants contended that this further deprived them of their IP rights, causing further loss to their investments.

In its defence, Uruguay countered that “both regulations were applied in a non-discriminatory manner to all tobacco companies, and they amounted to a reasonable, good faith exercise of Uruguay’s sovereign prerogatives.”

The case moved to examine whether Uruguay had failed to observe its commitments on the use of trademarks under the BIT and the scope of such commitments.

Upon submitting a registration application and being granted trademarks, Philip Morris argued that an investor should be able to hold and exercise the full range of rights available to trademark holders and that Uruguay would be committed observe these rights. Within these rights was notably the right to use its trademarks.


The tribunal found that “under Uruguayan law or international conventions to which Uruguay is a party the trademark holder does not enjoy an absolute right of use, free of regulation, but only an exclusive right to exclude third parties from the market so that only the trademark holder has the possibility to use the trademark in commerce, subject to the State’s regulatory power.”

This reflects and falls in line with the general concept that trademarks confer their holders only the right to prevent others from using their marks and are still subject to state regulations.

Furthermore, with regard to the scope of commitments, it was held that “a trademark is not a unique commitment agreed in order to encourage or permit a specific investment” and that Uruguay had no commitment nor obligation in relation to an investment under the BIT.

Ultimately, “a trademark gives rise to rights, but their extent, being subject to the applicable law, is liable to changes” subject to a state’s decided health measures. With no commitment to enable Philip Morris to use its trademark and with trademarks being subject to national laws and regulations, the tribunal found that Uruguay had not violated the BIT and dismissed the case.

Implications of the Decision

The case is highly significant given the polarity between actors and the debate on the use and application of domestic and international intellectual property laws.

Many hail this case as a significant victory in a series of tobacco companies fighting control measures, and others such as former New York Mayor Michael Bloomberg applauded Uruguay for standing up to the tobacco industry and showing others they can win.

The decision reinforces that states have a sovereign right to decide on their laws and regulations to protect their population.

Philip Morris General Counsel Marc Firestone, meanwhile, said the company “never questioned Uruguay’s authority to protect public health,” but sought to clarify international law.

Some critics, such as Laurent Huber, executive director for Action on Smoking and Health, contend that this was a public relations case for Philip Morris, aimed at discouraging other countries from imposing stronger public health regulations with the threat of a lengthy lawsuit by an opponent with deep resources. The annual revenue of Philip Morris in 2013 was reported at $80.2 billion, in contrast to Uruguay’s GDP of $55.7 billion.

Already in 2010, international lawyer and practitioner in investment treaty arbitration Todd Weiler stated in a legal opinion that:

“PMI’s BIT claim against Uruguay is emblematic of its long standing strategy to vehemently oppose the adoption of measures that might some day lead to plain paper of their products, or other measures that substantially interfere with the use and enjoyment of its crucial investment in its tobacco brands.” He added that “the claim is nothing more than the cynical attempt by a wealthy multinational corporation to make an example of a small country with limited resources to defend against a well-funded international legal action….”

The Bloomberg Foundation lent substantial financial support to Uruguay’s legal expenses.

Overall, given the definitive outcome of the present case in addition to cases where domestic, regional and international courts upheld measures to impose plain packaging and new tobacco regulations (see United Kingdom, European Union and Australia), other countries will perhaps no longer feel pressured and act on their own accord with regards to strengthening their public health measures.

International Organisation Support

Another significant aspect of the case is that the World Health Organization and the WHO Framework Convention on Tobacco Control (WHO FCTC) secretariat submitted an amicus brief during the proceedings which provided “public health on Uruguay’s tobacco packaging and labelling laws and detailed state practice in implementing similar measures.” Further details can be found in the WHO’s press release.

According to the FCTC, “The Tribunal accepted submission of the amicus brief on the basis that it provided an independent perspective on the matters in the dispute and contributed expertise from ‘qualified agencies’.”

This is not only affirmative that the FCTC provides legal backing to states who seek to provide protective health measures, but illustrates the success of international organisations in supporting national governments in their health efforts.

Lastly, in view of the place of arbitration some might question the existence of investor-state dispute settlement bodies such as the ICSID.

In Karen Hansen-Kuhn’s view as international program director at the US-based Institute for Agriculture and Trade Policy, these bodies empower companies to sue governments in private tribunals over measures that undermine their expected profits. In doing so, companies gain a chance for a “second bite at the apple,” which also “undoubtedly sends strong political signals to other local or national governments considering new programs.”

Hansen-Kuhn argued that rather than allowing investor-state dispute settlement bodies to decide, global governance rules should be given priority to lead the way on public health discussions.