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March 29th, 2016:

Smoke without fire – Japan becomes test ground for real tobacco e-cigarette

Two tobacco giants are seeing strong demand for their reboots of the e-cigarette in Japan, with Philip Morris International (PM.N) twice postponing a nationwide rollout and Japan Tobacco (2914.T) suspending shipments – both due to supply shortages.

Japan has become a key testing ground for the two companies and their new, real tobacco esmokes as they grapple with shrinking demand for traditional cigarettes in other developed countries.

Philip Morris, the world’s largest tobacco company, has postponed the nationwide rollout of its iQOS to April 18.

“We believe that the success of iQOS commercialisation in Japan will accelerate its global expansion,” Philip Morris Japan president Paul Riley told Reuters.

Japan Tobacco CEO Mitsuomi Koizumi told an earnings briefing in February: “We have very high expectations for growth of the so-called tobacco vapour category in five years or so from now.”

The iQOS is a tobacco stick that is heated just enough to produce an aerosol but not combust. The company is betting the presence of real tobacco will make it more satisfying to smokers than existing e-cigarettes.

The new device, priced at 9,980 yen (£62.5), appears similar to other e-cigarettes in that it is pen-shaped and battery-powered, and is heated to release tobacco vapour.

A key distinction is the refills, sold as Marlboro HeatSticks. Most e-cigarettes sold elsewhere use nicotine-laced liquid, which is heavily regulated in Japan. A pack of 20 HeatSticks sells for 460 yen, the same as regular Marlboro cigarettes.

Philip Morris has introduced the products in major cities in Switzerland, Italy and other countries, but Japan is the first country it plans a nationwide release.

The company had originally planned to sell the product throughout Japan on March 1, but postponed the launch to the end of the month due to a potential supply shortage after it saw stronger-than-expected sales in 12 prefectures where it has been test marketing.

The company estimates the market share of Marlboro HeatSticks reached 2.4 percent in Tokyo at the end of January.

Japan Tobacco, which commands about 60 percent of Japan’s cigarette market and is the world’s third-largest tobacco maker, has also got in on the action by acquiring two overseas ecigarette makers in the past two years.

In Japan, it has launched the Ploom TECH, priced at 4,000 yen and sold with 460-yen packs of five capsules. Ploom TECH’s selling point is that vapour generated from a liquid cartridge passes through the capsules’ granulated tobacco, creating a taste the company says is close to the real thing.

“There is definitely a need for products that are smokeless but are still satisfying as cigarettes,” said Masanao Takahashi, director at Japan Tobacco’s emerging products marketing division.

Like iQOS, Ploom TECH’s initial launch in the southern Japanese city of Fukuoka proved so popular that the shipment of the device were suspended after a week due to a supply shortage.

It is currently working on a nationwide launch and is also eyeing a global expansion later this year.

Is America’ First Tobacco-Free Generation Just Around The Corner?

Globally, for the last 50 years we have known that people who smoke cigarettes are more likely to develop and die from certain diseases than people who don’t smoke. In America alone, more than 20 million people have died because of smoking since 1964. However, 2.5 million were also nonsmokers who died, because they inhaled secondhand smoke, which is air polluted by other people’s cigarette smoke. Sadly, it is not only adults who are at risk, as about half of all the children between ages three and 18 years in the U.S. are exposed to cigarette smoke regularly, either at home or in places such as restaurants that still allow smoking.

For decades, the tobacco industry has been encouraging us to smoke through images that make smoking appealing in films and on television. As a result of this marketing by the tobacco industry, more than 3,200 children younger than 18 years old smoke their first cigarette every day in America. Nearly nine out of 10 smokers start before the age of 18, and 98 percent start smoking by the age of 26. Every adult who dies early because of smoking is replaced by two new, young smokers; if current risks hold, one of the two also will die early from smoking.

Many smokers choose to smoke in spite knowing the health risks because they are addicted to the nicotine in the tobacco. It only takes ten seconds for the nicotine from one puff of smoke to reach the brain and this rapid delivery of nicotine from the lungs to the brain is one of the reasons that cigarettes are so addictive. The nicotine causes cells in the brain to release dopamine; one of the main effects of dopamine released in the brain is to create a heightened sense of alertness and contentment. Over time, the brain cells of smokers are changed to expect the regular bursts of extra dopamine that result from smoking. When a smoker tries to quit, these brain changes cause strong cravings for more nicotine.

So, what will it take to be the first tobacco-free generation in America? Is it at all possible? Attempting to create this change is CVS Health, which has launched Be The First, a $50 million, five-year commitment, funded through the company and the CVS Health Foundation, to help deliver the nation’s first tobacco-free generation through education, advocacy, tobacco control and healthy behavior programming. The CVS Health Foundation has partnered with Scholastic, the global children’s publishing, education and media company, to introduce a school-based tobacco-prevention education program that teaches children about the health consequences of tobacco use and why it’s important to never start.