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Tobacco industry to benefit from new vaping proposals

Tobacco companies are taking over the e-cigarette industry. Does this mean they’re changing their spots?

Why are tobacco giants welcoming the Government proposal on electronic cigarettes? Because they stand to benefit.

For the past decade the tobacco industry have been buying up e-cigarette manufacturers and suppliers and investing heavily in developing these product lines.

The three dominant tobacco players in New Zealand – Imperial, British American Tobacco, and Philip Morris – all have e-cigarette subsidiaries under their parent companies.

The Government are proposing nicotine e-ciggy sales should be R18, have constraints on advertising and be banned in smokefree areas.

All going to plan, nicotine-vapours will be part of New Zealand’s health policy to help Kiwis quit smoking. The Government are just trying to figure out how it would work.

Perhaps this is the dawn of Big Tobacco being the ‘good guys’ for once – but experts are not so sure.

The Government wants to clarify the law surrounding electronic cigarettes, Peseta Sam Lotu-liga says.

Imperial Tobacco are “certainly wanting to assist” in “shaping good, solid and sound regulations”, says its corporate affairs manager Louise Evans McDonald.

“We are very supportive of adults having the right to choose a product,” she said.

Imperial bought e-cigarette brand Blu in 2014, after member company Fontem Ventures bought Dragonite in 2013 for $75m.

Associate Health Minister Peseta Sam Lotu-liga says the proposals on e-cigarettes are not about regulating who can supply them.

However, the corporation has never applied to Medsafe to have its products available to those that want to quit smoking. It’s been waiting on the Government to take a “lead steer” on regulations, Evans McDonald said.

At this stage, Imperial was just focused on selling tobacco in New Zealand. It made a 50 percent jump in profit from sales of $553m for the year ending September 2015.


It’s “unlikely” the tobacco industry are just wanting to be ethically responsible with their investments, says Otago University pubic health co-head Richard Edwards.

They’re really getting “a big slice” of the consumer pie by investing in a market that’s grown exponentially in the past few years, he said.

“It may mean it’s a way for them to get more influence over governments, and policy and so on, by appearing to be not so bad after all.”

Take a look at the track record of the industry’s court actions, he said, such as trying to prevent graphic health warnings in Uruguay, and losing the argument to prevent plain packaging in the UK.

“They’re still trying to prevent effective policies to reduce the harm caused by smoking. So that’s why I don’t think there’s any evidence that the tobacco industry has changed its spots.”


When asked if tobacco companies stand to benefit from the Government proposal, Associate Minister of Health Peseta Sam Lotu-Iiga responded: “It is not a proposal to regulate who is involved in the provision of e-cigarettes.”

The proposal would treat e-cigarettes in a “similar fashion” to tobacco regulations, “which tobacco companies already operate within”, he said.

He had not had discussions yet with the tobacco industry on the issue.

Philip Morris, known for the Marlboro and Chesterfield cigarette brands, welcomed the consultation announced by the Government, said New Zealand general manager Jason Erickson.

He pointed out that advances in vaping technology was “transforming the tobacco industry”.

Philip Morris International teamed up with Altria to market e-cigarettes in 2013, selling these exclusively outside the US. In 2014, it bought Nicocigs to enter the UK market.


In 2013, British American Tobacco was the first international company to launch an e-cigarette (called ‘Vype’) in the UK.

Its website says it will continue to invest “substantially” in the research, development and commercialisation of a pipeline of products. They also plan to launch Vype in other markets.

It also says it was the first company to have a nicotine product licensed as a “medicine” – their nicotine inhaler.

“If we are successful in developing and bringing to market a range of products that meet the needs of adult smokers seeking less risky alternatives to cigarettes, this will help to meet the objectives of a number of leading public health professionals.

“And of course it will also make commercial business sense to us and our shareholders.”

Statistics about vapers in New Zealand are hard to come by because the nicotine products are illegal to sell.

However, in the UK and US there are already a high rate of users. It’s estimated that 2.8million adults in the UK are vapers, according to Action on Smoking and Health, correlating with a decrease in smokers. However two thirds of vapers were still smokers.

American vapers are counted as high as 10 per cent of the US adults, according to a Reuters poll last year.

British American Tobacco was contacted for comment on the Government’s proposal, but have not responded in time for this article.

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