Background

AACS has lobbied alongside tobacco companies and echoed their arguments against public health measures. Legal tobacco sales are viewed as critically important for the Australian convenience industry, making up nearly 40% of total convenience store purchases and 25% of profits in 2021.³⁴

Nicotine e-cigarettes are not legally sold in retail outlets in Australia, but are available by medical prescription from pharmacies.⁵

Relationship with the Tobacco Industry

All three major transnational tobacco companies in the Australian market, Philip Morris International (PMI), British American Tobacco Australia (BATA) and Imperial Brands (Imperial), have been AACS members since at least 2018.⁶ The companies were listed as “Diamond and Emerald Members” on AACS’ website up to September 2022.⁷ As of 1 October 2022, they no longer appeared on this list.⁸

Membership benefits received by AACS member companies include “Government lobbying on issues impacting the industry”. Diamond members, who contribute $35,776 a year (in 2022), also benefit from “CEO engagement with Corporate Affairs team on industry relevant advocacy matters”.⁹

Figures 1 & 2: Diamond/Emerald members included all three major tobacco companies operating in Australia.⁷

AACS has accepted funding from tobacco companies over at least two decades. Internal documents show BAT co-sponsored its annual AACS Convention trade shows in the early and mid-2000s.¹⁰ Imperial was named as co-sponsor of AACS’s flagship annual convenience sector “State of the Industry Report” from 2014 to 2017.^11121314 BAT sponsored the report in 2018 and 2019.¹⁵¹⁶

Board members and leadership team

Tobacco executives have served on the AACS board. They include:

• Jason Erickson, Manager Key Accounts for PMI in 2014¹⁷¹¹
• Bede Fennell, senior BAT corporate affairs executive in 2005-06.¹⁸¹⁹ A former NSW Liberal Party branch director and Senator’s political advisor, Fennell later moved to the UK to work as BAT’s International Regulatory Affairs Manager from 2010-2012.²⁰

Two ex-tobacco company executives have formed AACS’s leadership team since 2021:

• Theo Foukarre, Chief Executive Officer. He began his career as a BATA graduate retail trainee at a time when the industry was battling the introduction of tobacco product display bans, and participated in AACS’ study tours in the early 2000s. ²¹²²
• Ben Meredith, Strategy and Policy Advisor. Meredith held various positions over a 20-year career with PMI. His last role with PMI was Commercial and Partnerships director.²³

In a trade press interview, Meredith cited a major career highlight while working at PMI as “the mobilisation and creation of a platform for major manufacturers to work together with industry partners on current and future legislative threats, the first in Australia”. Additionally, he was involved with securing $7m of Federal Government investment with the introduction of the Australian Border Force led Illicit Trade Task Force. The consortium has also managed to defeat the proposal of raising the smoking age to 21 in Tasmania three times in the last six years.”²⁴

New Strategic Direction

Meredith’s appointment in 2021 coincided with AACS announcing it was embarking on a “game-changing” new strategic direction with an increase of “five times greater” spending in government advocacy and strategic policy.²⁴ AACS has since undergone a major website and policy strategy overhaul, describing itself as now “working at the frontline to lead a range of initiatives concerning tobacco and nicotine, alcohol, sugar and general health in order to optimise consumer choice and balance.”²⁵ As part of this work, in June 2022 it launched a new ‘ACCESS by AACS’ digital platform to encourage retailers and consumers to lobby for changes to Australia’s e-cigarette sales laws and for packaged alcohol to be legally sold in petrol and convenience stores.²⁶

Lobbying Activities

AACS has lobbied alongside tobacco companies against a wide range of public health measures over the past two decades, including point-of-sale and display bans,²⁷ minimum purchasing age laws,²⁸ restrictive e-cigarette legislation,²⁹ plain packaging,³⁰ and increases in tobacco excise taxes.^3132293132

Plain Packaging

AACS was an original member of the Alliance of Australian Retailers (AAR), a front group set up in 2010 by PMI, Imperial and BAT to fight the Australian government’s pioneering plain packaging laws.³³

AACS was forced to withdraw that same year when the media exposed Big Tobacco’s multimillion dollar backing for AAR to run a political campaign against the government.³⁴ However, it has continued to lobby against plain packaging laws in the media,³⁵³⁶ as well as in Federal and state government submissions. Its arguments typically mirror those of the tobacco companies. In its 2019 submission to the Australian government’s review of the 2011 Tobacco Plain Packaging Act, AACS echoed BAT’s submission that plain packaging had been a failure and should be repealed, arguing that the policy had increased retailer costs and fuelled the illicit tobacco trade with “no discernible impact” on smoking prevalence.³⁷³⁸

E-cigarette regulation

Under its former CEO Jeff Rogut (2011-2020), ACCS joined the push to legalise retail sales of nicotine e-cigarettes and heated tobacco products for Australian consumers around 2015. Activities included lobbying politicians and writing submissions to related government inquiries; giving evidence at a major Federal parliamentary inquiry into the use and marketing of e-cigarettes in 2017;³⁹⁴⁰ and commissioning research and surveys about public support for newer products such as e-cigarettes.⁴¹

Between 2019-2020, AACS was a key member of a now defunct front group the Australian Retail Vaping Industry Association (ARVIA). In February 2021, the Australian Financial Review reported that the ARVIA secretly received hundreds of thousands of dollars from PMI under a contract with PR and lobbying agency Burson Cohn Wolfe.⁴² Other members included the Master Grocers Association and the Australian Lotteries and Newsagents Association, both of which also have current or past tobacco company members.⁴³⁴⁴

In 2022, all three retail trade bodies jointly called upon the Australian Government to urgently convene a National Vaping Summit.⁴⁵ They claimed that the current regulatory model was fuelling the “ever-rising black market “and allowing children to access vapes illegally”, but did not provide independent evidence to support either statement.⁴⁶ In response to questions about its tobacco company members and their efforts to overturn Australian’s e-cigarette laws that prohibit retail sales without a doctor’s prescription, AACS’s Theo Foukarre told the Financial Review in July 2022: “We unashamedly support our members and will always fight for their needs to remain relevant in a competitive market”.⁴⁷

Minimum tobacco purchasing age

AACS was part of a consortium of retail industry associations that lobbied the Tasmanian government alongside the tobacco companies, including PMI between 2015-2021, and succeeded in defeating a proposed Bill in Tasmania’s parliament to raise the minimum tobacco purchasing age from 18 to 21 years.⁴⁸

It claimed such a measure would “cost jobs” and drive Tasmanians to buy illicit tobacco thus giving “another free kick to the criminal gangs supplying the market”.⁴⁹ This is an argument often used by the tobacco industry.

Illicit trade

AACS is a regular attendee, alongside PMI, BAT and Imperial, at the twice-yearly Illicit Tobacco Industry Group meetings with government officials. This forum was set up in 2016.⁵⁰

AACS has issued press releases⁵¹⁵² and spoken in the media⁵³ regarding the impact of the illicit market on tobacco and e-cigarette trade, and has promoted the tobacco industry-funded KPMG’s annual illicit trade global reports.⁵⁴ It has described Australia as a lucrative market for smugglers that has increasingly suffered “a huge spike in the illicit tobacco trade, fuelled by the regulatory environment of regular and excessive excise increases on legal tobacco, and spiralling since the introduction of plain packaging”.⁵⁴⁵⁵ This is another argument often used by the tobacco industry.

Point of Sale Display Bans

In 2004 the Queensland, South Australian and NSW Governments were considering proposals to ban the display of tobacco products at the retail point of sale. In response, AACS helped form the National Alliance of Tobacco Retailers (NATR), with the objective of lobbying against these “drastic proposals” and to “protect tobacco retailers’ rights to display and sell a legal product to adults”.²⁷ The NATR, which represented 15,000 convenience stores, petrol stations, newsagents and small retailers nationally, with a combined tobacco product sales total of $8billion²⁷ urged its members to contribute donations to a special NATR “fighting fund”. ⁵⁶

Other Memberships

AACS is a member of the Australian Chamber of Commerce and Industry, whose members in 2022 included BAT and PMI, and Imperial in 2020-21.⁵⁷⁵⁸

Relevant Link

• AACS’s website

TobaccoTactics Resources

• Alliance of Australian Retailers
• Plain Packaging in Australia
• Illicit Tobacco Trade

References

The post Australian Association of Convenience Stores appeared first on TobaccoTactics.

This is illustrated by BAT’s activities in New Zealand and Australia in 2010-11.

In 2010, British American Tobacco New Zealand proposed fixed minimum tobacco prices. It made the case that this could prevent tobacco companies competing on price, and thus prevent them attracting children via cheap prices.⁶¹ This was framed as a way to protect children from smoking. It was sanctioned by David Crow, then CEO of BAT Australia and a Director of BAT in New Zealand.

Corporate Social Responsibility initiatives are used by the tobacco industry to help avoid effective regulation, by proposing voluntary measures or minor policy changes.

The New Zealand parliamentary select committee rejected fixing a minimum price on the grounds that an aggressive tobacco tax regime was a more appropriate answer. Minimum prices help increase industry profits but do not increase public revenue. An effective tax regime will bring public health benefits while simultaneously benefiting public (rather than just the industry) finances.⁶²⁶³

A press conference in May 2011 confirmed that the company  was not serious about the minimum price proposal. BAT threatened to flood Australia with half-price cigarettes and make the government liable for billions of dollars in compensation if forced to remove branding from cigarette packets. The Australian Daily Telegraph quoted Crow saying:

“When you look at the four Ps (product, price, place and promotion), pricing’s the big one and that’s the only one we have left. We will end up fighting on price.”⁶⁴

He went on to say that the cheap prices:

“basically means more people will smoke, more kids will smoke (…) It’s going to backfire and go bad and lead to more people smoking, which is just mad if you’re sitting at a government desk”.⁶⁴

Australia’s Health Minister Nicola Roxon dismissed BAT’s claims as baseless, saying: “Big tobacco are fighting to protect their profits, but we are fighting to save lives.”⁶⁴

TobaccoTactics Resources

• Price and Tax
• Plain Packaging

For a comprehensive list of all TCRG publications, including research that evaluates the impact of public health policy, go to TCRG publications.

References

The post Pricing as a CSR Tactic appeared first on TobaccoTactics.

The Western Pacific region includes 37 countries and territories and hosts nearly 1.9 billion people. ⁶⁷  The countries are Australia, Brunei Darussalam, Cambodia, China, Cook Islands, Fiji, Japan, Kiribati, Lao People’s Democratic Republic, Malaysia, Marshall Islands, Federated States of Micronesia (Micronesia), Mongolia, Nauru, New Zealand, Niue, Palau, Papua New Guinea, Philippines, Republic of Korea (Korea), Samoa, Singapore, Solomon Islands, Tonga, Tuvalu, Vanuatu and Viet Nam.⁶⁸⁶⁷ China, the largest country in the region, hosting 73% of its total population (1.39 billion), is home to approximately 20% of the world’s population.⁶⁹⁷⁰

Eleven countries (Nauru, Tuvalu, Marshall Islands, Palau, Micronesia (Federated States of), Singapore, Tonga, Kiribati, Samoa, Vanuatu and Fiji) in the WPR are among the 50 smallest countries in the world. ⁷¹

Smoking in WPR

According to the WHO tobacco trends report, the prevalence of tobacco use reported in WPR in 2020 was 25.7% and it was the second highest prevalence following the South East Asian region (SEAR).⁷²

In 2020, the average prevalence of tobacco use among males and females reported were 47.9% and 3.6% respectively. Compared to other regions, male’s prevalence rate is the highest of a region, and the female prevalence rate was the lowest. ⁷²

The global highest prevalence of smoking among people aged >15years reported in 2020 in the WPR and it was 23.3% (384 million people). The average smoking prevalence among males and females reported in 2020 were 44% (361 million) and 2.6% (23 million) respectively.⁷²

According to the WHO estimates, the tobacco smoking prevalence across different countries in the region varies from 14.1% in Australia to 52% in Kiribati. The highest tobacco smoking prevalence among males was recorded in Kiribati (68.6%) and the lowest was recorded in Australia and New Zealand (16.1%). Among the female population, the highest and lowest prevalence of smoking was recorded in Nauru (46%) in Malaysia (1%) respectively.⁷²

With regards to the number of smokers aged >15years in the region, China records the highest with 306.2 million, which accounts for nearly 80% of total smokers in the WPR (386.5 million).⁷²

Tobacco Production in WPR

China is the largest tobacco producer in the WPR as well as in the world, with a production of 2.61 million metric tons in 2019.⁷³It accounts for nearly 40% of world’s tobacco production in 2019.⁷⁴

According to the Taxation office of the Australian Government, a license is required to grow and/ or manufacture tobacco in Australia; and there have been no license holders since 2006. ⁷⁵

Brunei Darussalam, Cook Islands, Kiribati, Marshall Islands, Micronesia, Mongolia, New Zealand, Niue, Palau, Samoa, Singapore, and Tuvalu do not grow tobacco. ⁷⁶In Solomon Islands and in Vanuatu, tobacco is growing small scale for personal use and sales. ⁷⁶

Table 1:  Summary of farming and production of tobacco in the WPR ⁷⁷⁷⁸

*Information not available for Nauru and Papua New Guinea. Tobacco production, cultivation and cigarette manufacturing is not reported in Brunei Darussalam, Cook Islands, Marshall Islands, Micronesia, Niue, Samoa, Singapore and Tuvalu.

**N/A = Information Not available

Who dominates the market?

The tobacco products that destroy so many people’s lives are the result of the activities of a number of companies around the world. The Tobacco Supply Chain Database enables tobacco control researchers and advocates to understand what the supply chain is, where it is located and who is involved. For more information, access the database here.

British American Tobacco (BAT) dominated the Australian and Malaysian markets with 47.6% and 68% of the market shares respectively. ⁷⁹⁸⁰Philip Morris International dominates the cigarette market in Philippines (70.5%)and Singapore (47%) ⁸¹⁸²

The state owned tobacco monopoly in China (China National Tobacco Corporation (CNTC)) and in Japan(Japan Tobacco International (JTI)) lead the cigarettes market in the respective counties.⁸³⁸⁴In Lao, 72.3% of the tobacco market is owned by the Lao Tobacco Limited (LTL) since 2001, with placed joint venture with the government.⁸⁵

Local companies dominate in certain other countries, too, in the WPR: The Mongol Tobacco company (40%) in Mongolia, The Korea Tomorrow & Global Corporation (KT&G) (63.1% ) in  Korea,  and the Vietnam National Tobacco Corporation (VINATABA) (60.5% )in Viet Nam.⁸⁶⁸⁷⁸⁸

Table 2: Countries with the most sold cigarette brand owned by an international/ multinational company.^{899080868791929394959697}

*Only countries in which data is available are mentioned in the table.

Presence of Transnational Tobacco Companies (TTCs)

Table 3 summarises the presence of ‘big tobacco’, the transnational tobacco companies (TTCs), in WPR. These companies are present in the region by way of having either manufacturing facilities, full/partial ownership in local entities or distribution rights. Philip Morris International (PMI), British American Tobacco (BAT), Imperial Brands and Japan Tobacco International (JTI) are present in the WPR. BAT is present in fifteen countries in the region, followed by PMI in twelve, Imperial brands in eleven and JTI in nine (Table 3). The presences of all four ‘big’ TTCs are seen in eight countries in the region, namely, Cambodia, China, Japan, Malaysia, Mongolia, Philippines, Singapore and Vietnam. Though tobacco cultivation and cigarettes manufacturing is absent in Mongolia and Singapore, the presence of all four TTCs in these countries is notable.

Table 3: Presence of ‘big’ transnational tobacco companies in WPR ^989910010188

*Presence of transnationals are not formally reported in Brunei Darussalam, Cook Islands, Kiribati, Marshall Islands, Micronesia (Fed. Sts), Nauru, Niue, Palau, Solomon Islands, Tonga, Tuvalu and Vanuatu.

Links to government

Tobacco industry recruits retired higher ranking government officials aiming to facilitate the lobbying process. There are examples in WPR of senior government officials taking up leadership positions in tobacco companies, highlighting the ‘revolving door´phenomenon. As of 2021, Yasutake Tango, who served as the Director General of Financial Bureau, Ministry of Finance, Deputy Vice Minister and Special Advisor to the Cabinet in Japan, is the Chairman of JTI. ¹⁰²Similar incidents were reported from Malaysia and Vietnam.¹⁰³

In Malaysia, the new Chairman of BAT Malaysia appointed in January 2017 was the former Secretary General of the Ministry of Home Affairs. He is active in service to sports as the Trustee and Chairman of the Football Association of Malaysia.¹⁰⁴

*Please see our page on TPD: Revolving Door Cases for more information on similar cases in the world.

There are state owned tobacco enterprises in the region such as the State Tobacco Monopoly Administration (STMA) in China who owns China National Tobacco Corporation (CNTC), and Vietnam National Tobacco Corporation (Vinataba) in Vietnam. The government of Japan holds 33% of the shares of Japan Tobacco Group and the government of Lao PDR maintains a joint venture with Imperial brands (Lao Tobacco Limited). ^{102 103}

 Participation of Industry on Policy/Decision Making Processes

The Tobacco Regulation Act 2003 in Philippines allowed a seat for an industry representative in the Inter-Agency Committee -Tobacco (IAC-T), established to implement the act. Representatives of the tobacco industry including Philippine Tobacco Institute (PTI), a retailers’ association and a farmers’ group were invited as resource persons for the Committee to discuss increasing tobacco taxes in 2018to the House of Representatives.¹⁰²National Kenaf and Tobacco Board (LKTN) and Border Security Agency (AKSEM) in Malaysia, which are responsible for licensing tobacco retailers and enforcement activities on illicit trade respectively, are represented by the JTI.¹⁰³ Active interference from the industry in developing national policies and tobacco control measures were reported from China, Japan, Lao PDR and Vietnam.¹⁰²¹⁰³

Lobbying government officials

A report published by the Health Justice Philippines illustrated the role of industry in influencing the policy formation for Electronic Nicotine Delivery System (ENDS). The Joint Committees of Health and Trade at the House of Representatives proposed nine bills related to ENDS. Six out of nine bills proposed were oriented to adopting ENDS; and the other three showed the involvement of PMI.¹⁰² In Vietnam, the Ministry of Science and Technology promoted ENDS as a safer alternative following a meeting with PMI.¹⁰³

 Getting benefits/image promotion via CSR activities

Sponsorships from tobacco industry are allowed for poverty alleviation and disaster relief projects in Vietnam. Sponsorships by the Vietnam National Tobacco Corporation (Vinataba) in the fields of medical purposes, women empowerment, labour welfare, and scholarships are reported. Sponsorships in similar fields were reported from China and Republic of Korea, funded by the State Tobacco Monopoly Administration (STMA) and KT&G respectively. ¹⁰³

Many incidents of donations and CSR activities have been reported during COVID 19 pandemic. LT group, a company involved in tobacco and alcohol industry, and Japan Tobacco International (JTI) donated face masks to two hospitals in Philippines.^{105 106} Collapsible hospital beds were donated to Subic Bay Metropolitan Authority (SBMA) in Philippines by Philip Morris Fortune Tobacco Corp Inc, a joint venture between Philip Morris Philippines Manufacturing Inc. (PMPMI) and Fortune Tobacco Corporation (FTC).¹⁰⁷ Japan Tobacco International (JTI) Malaysia donated money to supply food for low income families.¹⁰⁸ Vietnam National Tobacco Corporation (VINATABA) in Viet Nam donated money, protective cloths and disinfection chambers to Bach Mai hospital.¹⁰⁹

 Good practices related FCTC Article 5.3

Civil Service Commission and Department of Health in Philippines issued a Joint Memorandum Circular in 2010, which provides a code of conduct consisting with the guidelines of the WHO FCTC Article 5.3, for all government officials. Some government departments enacted institute specific code of conducts or regulations complaint with the Circular.¹¹⁰ Similarly, Lao PDR introduced a Code of Conduct for the employees of the Ministry of Health in 2018.¹⁰²

The Government of Australia prohibited the acceptance of donations from the tobacco industry. New South Wales Electoral Commission, Australian Labour Party and Liberal Party banned the donations from the tobacco industry as well.¹¹⁰

In 2008, The Government of Australia started to maintain a Register of Lobbyists and a code of conduct for lobbying to make sure the transparency of dealings between the government representatives and the tobacco industry.¹¹⁰ Since 2011, the Ministry of Health in New Zealand maintained an online register with all the details of the meetings conducted with the industry which is made accessible to the public.¹¹⁰

 Roadmap to tobacco control

All countries in WPR are parties to the WHO Framework Convention on Tobacco Control (WHO FCTC) treaty.⁷⁶

Three countries (Fiji, Mongolia and Samoa) are Parties and another two countries (China and Republic of Korea) are Signatories to the  Protocol to Eliminate Illicit Trade in Tobacco Products. This protocol is an international treaty negotiated by Parties to the FCTC with the objective of eliminating all forms of illicit trade in tobacco products through cooperation of countries.¹¹¹

As of 2020, all countries in WPR have national level tobacco control laws in place.⁷⁶ WHO introduced MPOWER measures comprising the essential six elements (Monitor use and control measures, Protect from tobacco smoke, Offer help to quit, Warn against negative consequences, Enforce ban on advertisements and promotions and Raise tax) to implement FCTC effectively at country level. ¹¹² However, the 2019 WHO report on the tobacco epidemic shows that WPR has a considerable gap in achieving complete implementation of policies as per the FCTC directive thus maintaining compliance. Policy areas such as Monitoring tobacco use, Comprehensive cessation services and implementation of Graphical Health warning are well developed in most countries in the region. The compliance scores for each policy area suggest the existing gap between definition and enforcement of the control policies. For example, none of the countries have reached “fully compliant” (i.e. score of 10) in terms of comprehensive smoke-free legislation as per the FCTC directive. Some countries in the region have reached the score of 10 as fully compliant in terms of tobacco advertising, promotion and sponsorships. ¹¹²

The following table shows a summary of implementation of MPOWER strategies in each country in the WPR (Table 4).A level above zero is considered as implementation.

Table 4: Summary of implementation of MPOWER policies in the WPR ¹¹²

Lao People’s Democratic Republic is the only country in WPR that has completely banned the tobacco related CSR activities. Department of Education in Philippines issued a Department Order (No. 48 s. 2016) prohibiting tobacco industry sponsorships including CSR activities for both public and private schools.¹¹⁰

All countries in WPR, except Japan, Kiribati, Marshall Island, Micronesia, Nauru, Niue, Palau, Papua New Guinea, Tonga and Tuvalu, have implemented Graphic Health Warning Labels (GHWL) on cigarette packs.¹¹³

Australia and New Zealand have completed the implementation of plain packaging while Singapore has it under consideration.¹¹⁴

In November 2017, Viet Nam became the first country in Asia to adopt a policy to stop cooperating with the PMI-funded Foundation for a Smoke-Free World (FSFW). ¹⁰⁴

Some countries in the region have either banned or regulated electronic nicotine delivery systems (ENDS).Brunei Darussalam, Cambodia, Lao DPR and Singapore are the countries which have banned all types of e-cigarette sales in WPR. Australia and Japan have banned the sale of e-cigarettes with nicotine. ¹¹⁵

McCabe Centre for Law and Cancer, a non government institute in Australia, hosts the WHO FCTC Secretariat’s Knowledge Hub on Legal Challenges.This is a one the seven and the first WHO FCTC Secretariat’s Knowledge Hubs established in the world. The aim of establishing Knowledge Hubs is to assist the Parties to implement the articles of FCTC. ¹¹⁶

As part of WHO FCTC ratification, all countries in WPR have established a FCTC focal point for tobacco control and a National Coordination Mechanism (NCM) except for Fiji, Marshall Islands, Mongolia, Niue, Papua New Guinea, Tuvalu and Vanuatu. FCTC focal points in general are responsible for facilitating the establishment of NCM for FCTC implementation and serve as coordinating hubs for national and international stake holders.¹¹⁷⁷⁶

Industry interference

Tobacco industry (TI) has been ambitious about the Western Pacific region as the region hosts 1.9 billion of the world’s population, and the largest tobacco producer in the world.⁶⁷⁷³ Therefore the TI has been using multiple tactics to penetrate and expand the markets in the region.

The following are a selection of themes and examples of tobacco industry interference in the region:

Delaying enforcement of tobacco control laws through litigation

Australian Parliament passed world’s first Plain Packaging legislation on 21 November 2011 to be enforced from 1 December 2012. All four big tobacco companies, British American Tobacco, Philip Morris, Imperial Tobacco, and Japan Tobacco International, brought legal challenges against this legislation. Philip Morris Asia initiated legal proceedings under the Arbitration Rules of the United Nations Commission on International Trade Law 2010, claiming the legislation on plain packaging did not comply with The Australia – Hong Kong Bilateral Investment Treaty. This legislation was also challenged at the World Trade Organization (WTO) by a few countries. Additional legal action was filed at the Australian High Court against the legislation by PMI, BAT, Imperial Tobacco and JTI arguing the new legislation is an acquisition of property by the government.

*For more information on plain packaging and campaigning by tobacco industry against plain packaging laws in Australia, see our pages Plain Packaging, Australia: Challenging Legislation and Plain Packaging in Australia.

Interfering the development and implementation of tobacco control measures

In Japan, when implementing GHWL on cigarette packs, the proposal was dismissed by a committee under the Ministry of Finance which was reported as industry friendly. There was no GHWL displayed in China till 2015 owing to the influence of State Tobacco Monopoly Administration.¹⁰² PMI and BAT continue their Heated Tobacco Products (HTP) sale without prescribed GHWL amidst the unresolved classification on HTPs in Malaysia. ¹⁰³

With industry interference, China was unable to implement the national-level smoke-free policy. Japan remains with text-only GHWL on the package of tobacco products. Korea is unable to enforce the policies to prohibit the advertising including point of sale advertising and sponsorships. ¹⁰³

The government of Lao PDR made a joint agreement with Imperial Brands, which allows industry preferred tax rates depending on the production. This agreement caused to extinguish about USD 144 million to the government in tax revenues for the period of year 2002-2017.¹⁰²  Cambodia waived off the tax on tobacco leaves exported to Vietnam. ¹⁰²

Aggressive expansion of multinational companies in the region

TTCs are aggressively seeking to expand their markets in this region through acquisitions and mergers. TTCs have also capitalised on countries with weaker economies to enforce unreasonable conditions to favour them when making investments. When Imperial Tobacco acquired Lao Tobacco Limited in 2001, they negotiated a 25-year agreement with the government to charge only a 15% tax on cigarettes. It is estimated as of 2014, Laos have lost more than US$ 79 million in 13 years and will lose more than US$ 72 million in the next 12 years due to this agreement.¹¹⁸

Expansion plans have brought rival companies together on some occasions. South Korea’s leading tobacco company KT&G established a strategic alliance with Philip Morris International in January, 2020 to expand the market worldwide for its heat-not-burn cigarette brand ‘lil’. This partnership have potentially secured a global distribution network for KT&G which had remained domestic predominantly.¹¹⁹

 Pressuring governments to open their markets in the name of free trade

Tobacco companies have been able to capitalise on free trade agreements in the region to open the markets. During the 1980s, the US Cigarette Export Association, consisting of Philip Morris International, R.J. Reynolds and Brown and Williamson, petitioned against South Korean and Japan governments under the General Agreement on Trade and Tariffs (GATT) for not opening their markets to foreign cigarette manufacturers. As a result of the GATT ruling, Japan and Republic of Korea had to open its market to US cigarettes in 1990s.¹²⁰

 Interference on tobacco control measures through front groups and business councils

The International Tobacco Growers Association (ITGA) is a well-known global front group of the tobacco industry. Members in the region include the China Tobacco Society in China, Korean Tobacco Growers Organization in Korea, Phil Tobacco Growers Association in Philippines and Vietnam National Tobacco Corporation (VINATABA) in Viet Nam ^{121 122123} ITGA is alleged for smearing WHO and FCTC reports on tobacco control, providing false information about farmers and conflicting statistics, and creating fears among farmers, for example in Philippines and Vietnam. ¹²⁴

Most countries in WPR have American Chamber of Commerce (AmCham) country chapters, namely, Australia, Cambodia, China (China, Hong Kong, Shanghai, South China and Macau), Fiji, Japan (Japan, Okinawa), Malaysia, Mongolia, New Zealand, Philippines, Singapore, South Korea and Vietnam.¹²⁵Senior managers from tobacco industries have served in AmCham leadership positions and both AmCham and US Chamber of Commerce have become platforms for tobacco industry representatives to associate with senior government officials. In 2009, Chris Nelson served as the chairman of PMI Philippines and later he served as the Director of AmCham Board and Trustee of the
AmCham foundation in Philippines.¹²⁶ Similarly,  the Board of Governors of the AmCham was represented by the higher positions of tobacco companies in China, Malaysia and Singapore.¹²⁶

AmCham contributes to promotion of the image of tobacco industry via CSR activities, Graduate Trainee Programs and different events.¹²⁶¹⁰³

US-ASEAN Business Council, which includes a board member from PMI, held a dinner reception collaborating with the US Chamber of Commerce during the 74^thUN General Assembly in New York in 2019. ¹⁰³

* For more detail on the activities and movements of front groups in the region and across the globe, see our pages on Front Groups, Think Tanks and the US Chamber of Commerce.

Funding research institutes and think tanks on advocacy for tobacco industry

The tobacco industry’s usage of research and policy forums to promote its own agenda is a well-known strategy used to influence policymaking. From 2012 to 2015, Philip Morris International (PMI) funded US and UK-based think tanks International Tax and Investment Center (ITIC) and Oxford Economics Ltd, to conduct studies on the illicit trade in the ASEAN region.¹²⁷

There are instances where industry-funded think tanks directly interfered in tobacco control. In Australia, industry funded think tanks, consultancies and independent experts campaigned against implementation of plain packaging and undermined Australian government efforts, even after the implementation. Read more on this at Australia: Funding Think Tanks and Hiring Independent Experts. In Malaysia, when the Ministry of Health announced plans for plain packaging in 2016, Institute for Democracy and Economic Affairs (IDEAS), a Malaysian think tank, opposed it. IDEAS received funds from JTI and PMI in 2015 and 2016. Since 2015,IDEAS has been actively opposing tobacco control measures, especially plain packaging and tax increase.¹²⁸

The Foundation for a Smoke-Free World (FSFW) is a Phillip Morris International-funded organisation. In 2019, when Hong Kong government was considering a ban on next generation tobacco products, both FSFW and PMI submitted their arguments against it.

In WPR, FSFW have funded institutes in China and New Zealand,  to conduct tobacco smoking related research since 2018.¹²⁹

There are also examples of TTCs funding organisations to advocate on new generation tobacco products in the region. Factasia.org, a non-governmental organization based in Hong Kong, funded by Philip Morris International and Tobacco Vapor Electronic Cigarette Association (TVECA),is an example.¹³⁰

* Read more about the Foundation and the projects it funds on our pages Foundation for a Smoke-Free World and Foundation for a Smoke-Free World Grantees.

Sponsorships and Involvement in Sports

The government of Japan allows JTI to sponsor volleyball, chess, and golf teams and tournaments and getting media coverage as Japan has not banned the tobacco sponsorships.¹⁰³

*For more information on tobacco industry involvement in sponsoring sports events, see our Motorsport Sponsorship and Gudang Garam and sports endorsement.

Corporate Social Responsibility (CSR) activities

Corporate Social Responsibility(CSR) is a strategy used by the tobacco industry to build their reputation in the eye of the public, to gain sympathies from the governments and as a platform to interact with public officials.

Industry involves government officials during these CSR activities in order to get their endorsements and help for tobacco companies to gain acceptance in the community. Government officials from the Ministry of Industry and Trade have joined to distribute gifts to flood victims sponsored by Vietnam National Tobacco Corporation (Vintaba); and local authorities joined to distribute gifts to poor households at the inauguration ceremony of a bridge constructed sponsored by BAT. In Malaysia, the Minister of Domestic Trade, Cooperatives and Consumerism, whose ministry has a new responsibility to regulate electronic cigarettes, officiated at a Philip Morris-sponsored “Back to School” programme organised by the Salam Foundation, a regular recipient of PMI’s CSR grants.¹⁰⁴

CSR activities in Japan is oriented towards public education promoting “good manners” in smoking, such as smoking in designated ‘smoking spaces’, aiming to maintain a facade of reconciliation with non-smokers. Japan Tobacco International has established 943 locations as ‘smoking spaces’ with the partnership of 212 Municipalities in Japan. Similarly, in China, guidance was issued by Chinese National Bureau to develop “Beautiful China” with ‘civilised smoking environment’, which operates at national and sub national levels.¹⁰²

In 2017, Shanghai Tobacco Company donated RMB 10 million (USD 1.5 million) to the Shanghai Charity Foundation for education. Charity Award for outstanding corporate social responsibility in China was awarded to Shanghai Tobacco Company by China Charity Foundation.¹⁰²

Philip Morris Fortune Tobacco Corporation (PMFTC) conducts CSR activities through its CSR arm called “Embrace” in Philippines. ¹⁰³

*Read more about the CSR strategies by tobacco industries on our page CSR Strategy.

Illicit trade of Cigarettes (Tobacco Smuggling)

Studies based on industry documents have revealed that TTCs have allowed Tobacco Smuggling as a marketing strategy in several Asian countries with examples in China and Vietnam.¹³¹ One such study reveals, when China opened its tobacco market for international brands in 1979, BAT initially established its brands such as State Express 555 through smuggling. And BAT has tried to establish a legal presence only when risks for contraband sales were amplified.¹³¹ Another study reveals that one of the strategies adopted by BAT was to set up the contraband trade to gain access to tobacco market in Vietnam when the Vietnamese government banned importing of cigarettes in 1990. ¹³¹

* Refer to our pages Tobacco Smuggling and BAT Involvement in Tobacco Smuggling for more information.

 Lobbying for less regulation of next generation products

With increasing controlling laws on traditional smoking products, tobacco industry has focused on developing Next Generation Products (NGPs). Some common NGPs are electronic nicotine delivery systems (ENDS) which also referred to as e-cigarettes and Heated Tobacco Products.

Around the globe and in Asia the industry is lobbying governments for leniency in regulation, which would allow the companies to promote these products or be treated less restrictively than combustible tobacco products. One study shows that in Philippines in 2018, from the nine bills proposing ENDS regulation in Congress, six were oriented to adopting industry positions in relation to ENDS. Three bills, two in the House of Representatives and one in the Senate, showed the involvement of PMI. The Philippines E-Cigarette Industry Association (PECIA) and Vapers Philippines were vocal during the meetings, arguing that regulation should be assigned to the Department of Trade and Industry, promoting the harm reduction argument, and claiming that e-cigarettes are an effective smoking cessation tool.¹³²

* Read more about new tobacco industry products and strategies here on Next Generation Products and Harm Reduction

Tobacco tactics resources

*Japan Tobacco International

* US-ASEAN Business Council

*China National Tobacco Corporation

*South East Asian region

* Tobacco Smuggling

* CSR Strategy

* Foundation for a Smoke-Free World Grantees

References

The post Western Pacific Region appeared first on TobaccoTactics.

Since the early 2000s TTCs have developed interests in e-cigarettes (also known as electronic delivery systems, or ENDS), heated tobacco products (HTPs), snus and nicotine pouches. Companies have referred to these types of products as ‘next generation products’ (NGPs) although terminology changes over time.

• See the product terminology page for more details, including terms favoured by the industry.

All of the ‘big four’ TTCs (PMI, BAT, JTI, Imperial Brands) have invested in Swedish-style snus and related products called nicotine pouches, which they have promoted as part of their harm reduction strategies.

Background

Nicotine pouches are similar to snus pouches as they are made to be placed between the lip and gum, and do not require spitting. However, nicotine pouches do not contain fresh tobacco leaf but a form of dehydrated nicotine that does not need to be kept cold.¹³⁶ The pouches also generally contain plant fibres, flavourings and sweeteners.¹³⁷ Nicotine is absorbed into the bloodstream via the mucous membranes in the mouth.¹³⁶¹³⁷ They are not new products and similar oral pouches with contents other than nicotine have been available in Sweden for many years, regulated as food.¹³⁷

TTCs have identified opportunities to market these products in countries where there is either an existing market for snus, or conversely in markets where tobacco snus is currently banned.¹³⁶

Researchers have cautioned that nicotine pouches in particular may appeal to youth and non-smokers, as they are often sold in a variety of fruit flavours, in attractive packaging, and can be used discreetly (more so than e-cigarettes).¹³⁶¹³⁸  They can also contain high levels of nicotine where unregulated.¹³⁸

“Tobacco Free”

It appears that some nicotine pouches, may use synthetic, or “tobacco-free”, nicotine (rather than nicotine derived from tobacco leaf),  creating confusion and uncertainty as to how best to regulate these products.^136139140141

In its 2022 annual report, BAT states that its “current portfolio contains no synthetic nicotine”.¹⁴² PMI states that its pouches contain “nicotine derived from tobacco”.¹⁴³ JTI and Imperial Brands do not refer to synthetic nicotine and describe their pouches as “tobacco-free”.^144145146147

In 2022, the UK independent scientific Committee on Toxicity (COT) noted in a discussion paper:

“the apparent variation in how manufacturers present nicotine content and strength across different products, which may be confusing for the consumer. In addition, use of the description ‘tobacco-free’ may be misleading as the nicotine may be derived from tobacco, which raises concerns regarding carry over of toxicologically relevant contaminants (e.g., metals and nitrosamines).”¹⁴⁸

COT also raised concerns around the lack of specific regulations for nicotine pouches in the UK, and the absence of data other than that produced by the industry.¹⁴⁸ COT planned to produce a full report for the UK government in autumn 2023.¹⁴⁸

See below for more on regulation.

Figure 1: Images of nicotine pouch brands owned by the largest tobacco companies as of 2023. (Source: TCRG. Product images from company websites)

Cigarette Companies Investing in Nicotine Pouches

The interests of the four main TTCs are summarised below, as well as those of Altria which also sells nicotine pouches outside the US. PMI was the last to acquire this product through its purchase of Swedish Match in 2022.

British American Tobacco

In 2019, BAT introduced nicotine pouches to its portfolio, marketing them as Lyft in the UK and Velo in the US.^149150151 A July 2019 news report suggested that BAT’s nicotine pouches were also on sale in Sweden, Italy and Tanzania.¹⁵² BAT started  promoting Lyft /Velo in “emerging markets” in LMICs (see below).

In November 2020, BAT announced that it had acquired US-based nicotine pouch company Dryft Sciences, via its subsidiary Reynolds American Inc. (RAI), with the pouches to be sold under the Velo brand.¹⁵³ According to BAT this would give them a combined share in the US nicotine pouches market of around 10%.¹⁵³

BAT distinguished Epok, Lyft and Velo from traditional snus and allocated them to a new product category, which it called “modern oral products”.¹⁴⁹ In November 2019, it announced that it would consolidate its NGPs under fewer brand names, and all its “modern oral” products would be sold as Velo.¹⁵⁴ It continues to market the product as Lyft in Sweden and Denmark.¹⁵⁵ It also sells nicotine pouches under its Niconovum brand Zonnic in Sweden.¹⁵⁶

BAT reported that it had sold 4 billion pouches worldwide in 2022, and held 69% of the market in Europe, although sales in the US had declined since 2021.¹⁴²¹⁵⁷ It also referred to an estimate that the global nicotine pouch market would grow by 500% by 2026, and referred to the launch of new products ranges called Velo Mini and Velo Max.¹⁴² In 2023, BAT said that Velo was leading the market outside of the US and contributing to revenue growth.

In 2024 BAT reported that it had opened a new “innovation centre” in Southampton, UK, to focus on the development of nicotine pouches.

• For information on BAT’s other nicotine products see Newer Nicotine and Tobacco Products: British American Tobacco

Japan Tobacco International

Japan Tobacco International sells its  Nordic Spirit brand of nicotine pouches, mainly in Europe.¹⁵⁸¹⁵⁹ In its 2020 integrated report Japan Tobacco stated that the pouch was sold in nine countries, and that it held 70% of the UK market.¹⁶⁰¹⁶¹ In 2021, it said that it “prioritized Sweden, Switzerland and the UK”.¹⁶² In 2022, JTI announced that it had test-launched Nordic Spirit in the Philippines and was planning to launch a new “formula” in the UK.¹⁴⁵ In 2023, new strong and extra strong spearmint flavoured pouches went on sale in the UK, to meet the “demand for stronger variants”.¹⁶³ According to the Nordic Spirit website its extra strong pouches contain 11mg per pouch (17mg per gram).¹⁶⁴

JTI also refers to its nicotine pouches as “modern oral” products.

• For information on JTI’s other nicotine products see Newer Nicotine and Tobacco Products: Japan Tobacco International

Imperial Brands

In May 2018, Imperial Brands announced that it had launched a version of its snus brand Skruf without tobacco leaf, called Skruf Super White, intended for sale in Sweden and Norway.¹⁶⁵ This product appears to have been rebranded as zoneX for the UK market in August 2019, however its direct sale in the UK was later discontinued.^{166167168  169} In 2022 Imperial’s website stated that in 2021, ZoneX  had “first launched in Sweden and Austria”, further launched in “Norway, Denmark and Estonia” in 2022 and finally made available in “Iceland and duty-free Middle East” in 2023.¹⁴⁶¹⁴⁷

In 2020, IMB had previously published an article on its Imperial Science website exploring what it described as “The Tobacco-Free Nicotine Pouch Opportunity”.¹⁷⁰They later said they had launched a “cutting edge bamboo fibre based product”.¹⁷¹

Imperial’s website describes ZoneX users as:

“young adult nicotine users, typically 25+, urban and open-minded. They’re making lifestyle changes and favour a discreet way to enjoy nicotine.”¹⁴⁷

In 2023, Imperial acquired several nicotine pouch brands from Canadian company TJP Labs, to market in the US.¹⁷²

Altria

In 2019 Altria announced that it was acquiring an 80% share in oral nicotine pouch on! from Swiss tobacco company Burger Sohne.¹⁷³¹⁷⁴ It set up a new subsidiary Helix Innovations, through which it would manufacture and market the product.¹⁷³¹⁷⁴ Altria stated that, as on! was already on sale across the US before August 2016, it did not require pre-market authorisation from the US Food and Drug Administration (FDA).¹⁷³ However, by mid-2020 it had submitted 35 Pre-Market Tobacco Product Applications (PMTA) for on!, it was sold in 40,000 US stores, and Helix was increasing manufacturing capacity.¹⁷⁵ According to Altria, by the end of 2020 the number of stores selling on! had nearly doubled.¹⁷⁶ A 2020 investor transcript reported that the product was “attracting female tobacco consumers due to its spitless, white and compact format” and accounted for 30% of this type of oral nicotine product.¹⁷⁷

In 2021, Altria acquired the remaining 20% of on!.¹⁷⁸ In 2022, it stated that it held over 20% of the UK nicotine pouch market, although the category was “increasingly competitive”.¹⁷⁹ It also stated that Helix operates internationally, although most of its oral products are sold in the US.¹⁷⁹ As of February 2023, the FDA had not issued marketing order decisions for any on! products.¹⁷⁹

Philip Morris International

At the beginning of 2021, PMI did not have a nicotine pouch product on the market. However, in a presentation to investors in February that year, the company noted the “attractive economics” of this small, but growing, product category.¹⁸⁰ CEO Andre Calantzopoulos said PMI was planning to develop a product through a “combination of partnerships and internal development”.¹⁸¹

In May 2021, PMI acquired Danish snus manufacturer AG Snus, manufacturer of Shiro nicotine pouches.¹⁸²¹⁸³ For more details see Cigarette Companies investing in Snus.

In July 2021, PMI announced that it had acquired Fertin Pharma, a company specialising in nicotine replacement therapy (NRT) type products.¹⁸⁴ At this time, PMI also began referring to gums and nicotine pouches as “modern oral” products, as BAT and JTI do.¹⁸⁴

• For more information see: Tobacco Company Investments in Pharmaceutical & NRT Products

At this time, PMI began referring to gums and nicotine pouches as “modern oral” products (as does BAT).¹⁸⁴

In 2022, PMI acquired Swedish Match.¹⁸⁵ Swedish Match specialises in snus and nicotine pouches, and does not sell cigarettes. By 2023, Shiro nicotine pouches were presented on the PMI website, along with snus, as “oral smokeless products”.¹⁸⁶ Its nicotine pouch Zyn has been sold mainly in Sweden and some other European countries, as well as the US (since 2015).¹⁸⁷ It also sells the Volt Pearls product in Denmark, Iceland and Sweden.¹⁴³

• For more information see Newer Nicotine and Tobacco Products: Philip Morris International and Swedish Match

In its 2022 annual report, PMI stated that the Zyn trademark had an “indefinite life due to the fast growth and the leading position of the brand in the market”.¹⁴³

The Global Market

According to a Tobacco Reporter article published in 2024, Euromonitor International values the global market at over US$10 billion and projects it to reach US$15 billion by 2027.¹⁸⁸ Nearly 15 billion units were sold in 2023, but they remain a small part of the market.¹⁸⁸

In 2023, Euromonitor analysts noted that in the US, there were over US$8.5 billion of retail sales and nearly 3% of the population uses pouches. However, the most rapid increase in sales in 2023 was in Pakistan where BAT markets Velo (see below), and they expect most growth going forward to be in Asia Pacific and Eastern Europe.¹⁸⁸ They also noted that most pouches were sold in the US in 2023, the other top five markets (Sweden, Denmark, Pakistan and Austria) between them sold less than a third of the units sold in the US market.¹⁸⁸ Other nicotine pouch markets include UK, Germany, Poland, Czech Republic, Uzbekistan, Ukraine and Indonesia.¹⁸⁸¹⁸⁹

PMI’s purchase of Swedish Match immediately gave it a 60% share of the global market in 2022, a jump from almost zero in 2021. BAT held around a sixth of the global market, and Altria and Swisher (a US-based tobacco company which also sells cigars, snus and snuff, and other nicotine products)¹⁹⁰ each held around a twelfth share.¹⁹¹ The global market shares of other companies, including JTI and Imperial Brands, were negligible.

• For information on TTC interests in tobacco leaf snus see Cigarette Companies Investing in Snus.

Regulation of Nicotine Pouches

Nicotine pouches are subject to a variety of regulations around the world, from outright bans to partial or selective regulation, depending on how they are defined and classified by governments. In many cases no regulation is in place. The Institute for Global Tobacco Control (IGTC) tracks and reports regulatory approaches around the world (see below).¹⁹² Although not all countries contribute to its Policy Scans for nicotine pouches, the most up to date information available on the IGTC database at the time of writing is referenced below.

In the UK, as of 2023, nicotine pouches are regulated under general consumer product safety regulations, not as tobacco products. They are widely available in shops and online.^148192193 Concerns have been raised over their availability to youth, and social media marketing.^148194195 The UK Department of Health and Social Care stated that it was aware of concerns, but as the use of pouches was low (in England) it did not plan to introduce further regulation at this time.¹⁹⁵

European Union

While there is an EU-wide ban on tobacco snus, nicotine pouches are not covered by current tobacco product regulations. This is subject to review in the next revision of the Tobacco Products Directive.¹⁹⁶¹⁹⁷ It is however important to note that individual member countries are diverging in the way they regulate these products.

Sweden has an exemption from the EU ban on snus.¹⁹⁷ In Sweden, pouches containing products other than tobacco and nicotine have long been regulated as food items.¹³⁷ Zonnic oral pouches (owned by RAI from 2009,¹⁹⁸ and BAT from 2017) were registered as an over-the-counter (non-prescription) drug in 2013, but only available from pharmacies and other regulated outlets.¹⁹⁹ There are a range of nicotine replacement therapies (NRT) products registered under the same brand name (see below). In 2019, the Swedish National Food Administration advised that nicotine pouches should now not be regulated as food, as they were intended to be spat out and the contents were mostly absorbed through the mouth, not the stomach.¹³⁷

Elsewhere in Europe regulation varies widely. In France nicotine is classified as a poisonous substance, subject to regulation, but pouches can be regulated as a medicine for cessation purposes.¹⁹² In Finland nicotine pouches are no longer classified as medicines, unless marketed as such.²⁰⁰ In Norway (not in the EU but a member of the European Economic Area) a total ban on nicotine pouches and other newer products was lifted in July 2021, and replaced by a market approval scheme.²⁰¹²⁰² Both tobacco-derived and synthetic nicotine pouches are regulated, but advertising and sponsorship are banned.¹⁹²

In contrast, in March 2023, Belgium announced a total ban on nicotine pouches, by royal decree.²⁰³²⁰⁴ BAT were reported to be petitioning the courts to annul the decree.²⁰⁵ The Netherlands announced a ban a month later.²⁰⁶²⁰⁷

In 2021, the German Office of Consumer Protection and Food Safety (BVL) stated that nicotine pouches were not regulated under either the tobacco legislation or as foodstuffs and so could not be legally sold.²⁰⁸ BAT removed its nicotine pouches from the German market that year.²⁰⁸ Some federal states have withdrawn pouches, and some products have been classified as a health hazard due to high levels of nicotine.¹⁹²

North America

In the US, nicotine pouches are regulated by the FDA and subject to age restrictions, a nicotine health warning and pre-market assessment .¹⁹⁷ There are also regulations specific to synthetic nicotine.²⁰⁹ Nicotine pouches are freely available to consumers.¹⁸⁷ US researchers have noted a “loophole”: as nicotine pouches were not included in the smokeless tobacco regulation, companies are able to advertise nicotine pouches on radio, TV and other media.²¹⁰

Initially the Canadian government did not authorise the sale of nicotine pouches, and issued an alert, stating that as they had not been assessed by “safety, efficacy and quality” they might contain high levels of nicotine and be harmful to health.²¹¹ These products are now regulated, either classified as a ‘Natural Health Product’ or as a prescription drug, depending on the level of nicotine.¹⁹² In July 2023, Health Canada authorized the marketing of BAT’s Zonnic nicotine pouch (with 4mg of nicotine) as a natural health product.^212213214215 Physicians for a Smoke-Free Canada reported that this product contains the same ingredients as BAT’s Velo,²¹⁴ and noted that:

“BAT will face very few restrictions on how it can market ZONNIC nicotine pouches in Canada, other than with respect to how it represents the therapeutic benefits of the product.”²¹⁴

Australia & New Zealand

As with e-cigarettes and heated tobacco products, nicotine pouches are banned from sale in Australia, and only available on prescription.¹⁹²

In New Zealand, oral tobacco products (including snus) and nicotine pouches are banned, unless approved as medicines.¹⁹² (E-cigarettes are regulated, but not banned)

New and emerging markets

In some low and middle-income countries, including Argentina, Bangladesh, Georgia, Indonesia, India, and Nigeria, only tobacco-derived products are regulated as tobacco products, but not those derived from synthetic nicotine.¹⁹² In others, including Brazil, Brunei Darussalam, Iran, and Thailand, both are regulated as tobacco products.¹⁹² In Ukraine there are no specific regulations in place, but synthetic nicotine pouches are regulated as a food product.¹⁹² Mauritius bans both,¹⁹² whereas in Uruguay, nicotine pouches are categorised as a form of nicotine replacement therapy (see below).¹⁹²

At the time of writing, July 2023, nicotine pouches remain unregulated in most countries.¹⁹²

As researchers from Norway, among others, have pointed out:

“The boundaries between various tobacco and nicotine products are getting less clear, making it possible for the tobacco and nicotine industries to take advantage of the discrepancies in regulation.”¹³⁸

• The Policy Scan Project, by the Institute for Global Tobacco Control (at Johns Hopkins University), which tracks and reports regulatory approaches to nicotine pouches around the world.
• For information on tobacco regulation more broadly, see the Tobacco Control Laws website, published by the Campaign for Tobacco Free Kids (CTFK).
• For countries that are parties to the WHO Framework Convention on Tobacco Control (FCTC) progress towards implementation of relevant articles, including newer products, is detailed in the FCTC implementation database.²¹⁶

BAT Promoting Nicotine Pouches in LMICs

BAT began marketing Lyft in Kenya in 2019, and Pakistan in 2020. In 2021, BAT said that it was also test marketing its product in Bangladesh and Indonesia.²¹⁷ and “consumers are familiar with other similar oral products”.²¹⁸ The company has identified an opportunity to market these products in countries where electronic devices are less popular, affordable, or available due to regulatory restrictions. It also referred to markets where there is was a “pre-existing ritual of oral product consumption”.²¹⁷²¹⁸

Kenya

After announcing its intention to sell nicotine pouches in Kenya, BAT launched Lyft in the country in December 2019.^152219220 In February 2020, the company announced that it was planning to build a new factory in Nairobi to produce nicotine pouches, and for Kenya to become a regional export hub for the product.²²¹ BAT Kenya (BATK) managing director, Beverley Spencer-Obatoyinbo said that “Given the high incidence of oral stimulant use among smokers, we believe that this new product category will provide a viable alternative to smoking”, although she presented no evidence at the time to support this statement.²²¹

In response to concerns about the potential impact on tobacco farmers, Business Daily Africa reported that BATK’s head of legal and external affairs stated that the company was “using proceeds from the tobacco portfolio to invest in the new categories. When the time comes, we will help them (farmers) transition to sustainable crops,” although this was “not a change that can happen overnight”.²²² Spencer-Obatyoinbo confirmed that BAT switching to “non-combustibles” was “not an immediate thing”.²²² Nevertheless, in September 2020, BAT was reported to be lobbying the Kenyan Revenue Authority (KRA) for a tax break for the product, citing its large investment and potential exports.²²³ (According to BAT the nicotine for its pouches is currently manufactured in Switzerland.)²²³ The Chief Executive of the International Institute for Legislative Affairs argued that this would be a “huge setback for tobacco control interventions in Kenya”.²²⁴ For more information see the Kenya country profile page.

Nicotine pouches were initially registered as a pharmaceutical product by the Kenya poisons board.²²⁵ This designation was challenged by local advocates.²²⁵ Health Cabinet Secretary Mutahi Kagwe wrote to the poisons board, arguing that the product had been wrongly designated, and stated that it was being distributed via vending machines in contravention of the law.²²⁵²²⁶ Although Lyft was de-registered and effectively banned, there was a reported lack of enforcement and the product was found to still be on sale in December 2020.²²⁶²²⁷ In February 2021, the Kenyan government said that it was intending to classify nicotine pouches as a tobacco product under the Tobacco Control Act, making the product subject to similar marketing restrictions as cigarettes and other tobacco products.²²⁶ Concerns have been raised in Kenya over potential use by children (see below).

In February 2021, BAT told investors that “In Kenya, we have temporarily suspended sales due to local regulatory challenges and continue to engage with the local authorities.”²¹⁷ In March it told the Kenyan media that it was planning to spend Kenya Sh1 billion (US $10 million) on marketing Lyft once the product was approved.²²⁸ This included plans to set up distribution networks across 21 countries in the Common Market for Eastern and Southern Africa (COMESA).²²⁸

In 2022, BAT’s nicotine pouch was back on the market in Kenya, as Velo.²²⁹ In its annual report, BAT stated it had “reintroduced Velo to a limited retail universe with positive early momentum, as we focus on driving guided trial.”¹⁴²

The introduction of Velo has not been without controversy, and politicians in Kenya are again asking for the product to be banned. Letters between BAT and the Kenyan Ministry of Health reveal that BAT had lobbied to reduce the size of warning labels on the product.²³⁰

BAT has also lobbied against increased taxes on these products.^231232233

Pakistan

Velo was launched by BAT in Pakistan in December 2019, with a campaign run by Ogilvy Pakistan “positioned towards affluent adult consumers”.^234235236

A Freedom of Information Request submitted by Bath TCRG revealed that UK High Commission staff in Pakistan had attended a “social event” for Velo in February 2020. The FOI stated that “They were invited by the event coordinator and did not meet any Velo representatives at the event.”²³⁷

• British diplomats have previously been associated with lobbying by BAT in Pakistan, and other LMICs. See the page on UK Diplomats Lobbying on Behalf of BAT

BAT said it was “particularly proud of Velo’s performance in Pakistan”. ¹⁵⁷ In its 2022 annual report, BAT stated that Pakistan was its third largest market for nicotine pouches. It said that the market was “enabled by powerful, consumer-centric digital activations”, and that it was selling over 40 million units a month.¹⁴² These sales figures, and rapid growth, are roughly consistent with Euromonitor’s estimates.¹⁹¹

South Africa

Unlike NRT products, nicotine pouches are not on the South African Health Products Regulatory Authority’s list of approved medicines, for which it would be subject to clinical trials and regular monitoring updates. Nicotine pouches are also not regulated as tobacco products because the nicotine is synthetic and does not fall under the definition of tobacco products in the Tobacco Products Control Act (2018). This means that they can be sold without health warnings and can be sold to those under the age of 18.²³⁸

South Africa is also one of the target markets for PMI’s ZYN nicotine pouches. ²³⁹

Indonesia

In February 2021, BAT referred to the test marketing of its nicotine pouches in Indonesia.  BAT reported “encouraging results”.²¹⁷ External statistics suggest the market remained small.¹⁹¹

Concerns Around Use by Youth

Researchers in the US have identified the risk of nicotine pouches appealing to non-smokers and in particular youth, as some products come in a range of fruit flavours and are more discreet than e-cigarettes.¹³⁶²⁴⁰ As of 2024, PMI was facing a lawsuit for ZYN in the US on the basis of the product being addictive and harmful to young people. The lawsuit states that PMI is benefiting from the promotion of the brand on social media. ²⁴¹The FDA has also issued warning letters and penalty charges to a number of retailers for the underage sale of flavoured ZYN nicotine pouches. As of April 2024, the FDA has not authorised the sale of ZYN products in the United States. ²⁴²²⁴³

Although they can only legally be sold to adults in the UK, concerns have been raised over potential use by children.¹⁴⁸²⁴⁴

In 2020, there were reports that Lyft was being used by children in Kenya.²²¹²⁴⁵ Children were also reported to be using the products in schools in Scotland.²⁴⁶

In February 2021, journalists from the Bureau of Investigative Journalism published an article describing how BAT used social media influencers to promote its nicotine pouches in multiple countries, including Australia, Kenya and Pakistan. The authors argued that this was part of a campaign targeted at young people, rather than older adults trying to quit smoking.^247248249

An investigation by The Guardian newspaper in 2023 identified further promotion in the UK via social media and music events, as well as prize draws and the provision of free samples.¹⁹⁵

BAT also promotes Velo through motorsport sponsorship.²⁵⁰²⁵¹

• See Snus: Marketing to Youth for information on earlier tobacco company marketing of the tobacco leaf product.

Industry Alliance Lobbying in the EU

The ‘Nordic Nicotine Pouches Alliance’ (NNPA) was established in Belgium in 2020.²⁵² As of March 2024, BAT and JTI are the only partners listed on the NNPA website.²⁵²

The NNPA webpage states “We engage, inform, and increase knowledge about nicotine pouches”.²⁵³  However, on the EU transparency register, its stated goal is to “focus on regulation concerning nicotine pouches within the European Union”, specifically the Tobacco Products Directive and the Tobacco Taxation Directive.²⁵⁴²⁵⁵ Jonas Lundqvist, NNPA CEO, is listed as the accredited lobbyist on the EU register.^256254255 In 2022, the estimated cost of NNPA lobbying activities was listed as €400,000-499, 999, four times the amount listed in 2021.²⁵⁴²⁵⁵

NNPA also runs the online news platform ‘Pouchforum’.²⁵⁷ Articles published on the platform have accused the European Commission of misrepresenting the risk of nicotine pouches,²⁵⁸ and suggested that the Commission does not act in a transparent manner.²⁵⁹ The site editor is Robert Casinge, also ‘Senior Partner’ in the NNPA, and previously listed as a lobbyist on the EU register.²⁵⁵²⁶⁰

Framing Nicotine Pouches as NRT

TTCs appear to be framing their nicotine pouches as a nicotine replacement therapy (NRT), which is designed to help smokers quit.^261262263 However, they are also marketing them as consumer products, including for use when it is not possible to smoke or use e-cigarettes, for example on a plane. ^264265266

In 2016, researchers in the US pointed to the implications for both product regulation and smoking cessation,¹⁹⁸ and the:

“blurring of the lines between cessation products and novel tobacco products and potentially confusion and misuse by consumers which may result in initiation or situational and dual use of tobacco products.”¹⁹⁸

All four of the main transnational tobacco companies have conducted their own research on nicotine pouches, published on their science websites.

BAT markets Niconovum NRT products, in the US and Sweden under the brand name Zonnic; in Sweden, Zonnic products include nicotine pouches.^156267268 In 2020, BAT also rebranded its Revel nicotine lozenge as Velo – the same brand as its nicotine pouch – in the US (and submitted it for pre-market approval). ²⁶⁹²⁷⁰

In its 2022 annual report, BAT stated that “[t]he weight of evidence suggest Modern Oral nicotine pouches have a profile that is comparable to nicotine replacement therapy products”. It cited BAT’s 2021 research on Velo, which compared snus, nicotine pouches and NRTs.¹⁴²²⁷¹ However, the 2022 report then went on to acknowledge “low levels of average daily consumption and high poly-usage”, leading BAT to submit a further PMTA for a “superior” product.¹⁴² As of February 2023, no Velo products had received pre-market approval in the US.¹⁴² At the time of writing, it was not yet clear how BAT planned to promote its Zonnic nicotine pouch after it was approved for sale over-the-counter in Canada in July 2023.^212213215

BAT’s science website presents its research on nicotine pouches, as well as a summary of the ‘Snus and the Swedish Experience’.²⁷² For more background on this topic see The Swedish Experience.

PMI acquired Fertin Pharma in 2021, stating that Fertin was a “leading producer of Nicotine Replacement Therapy (NRT) solutions”.¹⁸⁴ PMI has also referred to the “medical” or “pharmaceutical” grade nicotine in its products.¹⁴³²⁷³ (Read more about on PMI’s acquisition of pharmaceutical companies.)

PMI’s science website presents its research on nicotine pouches.²⁷³ It does not refer to its snus products on these pages.^273274275

Imperial Brand’s science website has cited evidence on tobacco-leaf snus and other next generation products (NGP)s to support its statement that “these products are more satisfying – and acceptable – to adult smokers than traditional nicotine replacement products (NRTs) like patches, lozenges, and gums”.¹⁷⁰  However, the evidence it cites pre-dates the widespread sale of nicotine pouches by TTCs: the 2016 report from the Royal College of Physicians (RCP) refers only to Zonnic and does not discuss satisfaction of acceptability of the product.²⁶³

Imperial refers to its use of “high purity pharmaceutical grade nicotine”.¹⁷⁰²⁷⁶ In May 2021, Imperial published its “comprehensive scientific assessment” of its nicotine pouches, in comparison to cigarettes.²⁷⁷

Japan Tobacco‘s science website does not feature nicotine pouches, although it includes  its research on these products.²⁷⁸

Environmental Impact

The impact of cigarette filters on the environment is well documented. More recently, the impact of single use, or ‘disposable’, e-cigarettes has been highlighted

As the nicotine pouch market grows the disposal of these single use products is an emerging concern.²⁷⁹²⁸⁰

On its website, BAT states that the Velo plastic cans are being upgraded to use single polymer plastics in order to “align with the group’s ESG ambitions”. ²⁸¹

TobaccoTactics Resources

• Snus
• Cigarette Companies Investing in Snus
• Newer Nicotine and Tobacco Products
• Harm Reduction

TCRG Research

• S. Peeters, A. Gilmore, Understanding the emergence of the tobacco industry’s use of the term tobacco harm reduction in order to inform public health policy, Tobacco Control, 2015,24(2):182-189

For a comprehensive list of all TCRG publications, including TCRG research that evaluates the impact of public health policy, go to the Bath TCRG’s list of publications.

References

The post Nicotine Pouches appeared first on TobaccoTactics.

Factasia.org is a Hong Kong based organization, founded in 2013, which promotes newer nicotine and tobacco products, including e-cigarettes (also known as electronic nicotine delivery systems, or ENDS) and heated tobacco products, and campaigns for their use in tobacco harm reduction. It is registered as a company, Fact Asia Consultants Ltd, in Hong Kong.²⁸⁶²⁸⁷

As of October 2020, Factasia´s website stated:

“factasia.org seeks to represent the rights of adults in Asia who choose to enjoy smoking or other related forms of consumption of nicotine. factasia.org aims to protect their interests and to provide independent and unbiased data on the issues surrounding smoking – and related issues – in Asia.” ²⁸⁸

According to the tobacco industry publication Tobacco Reporter, Factasia.org was formed to represent the rights and interests of smokers who choose to smoke or consume tobacco, and to provide data on the issues surrounding smoking in Asia.²⁸⁹

Factasia.org receives funding from Philip Morris International, as well as the Tobacco Vapor Electronic Cigarette Association (TVECA) and other companies providing services to the tobacco industry, according to its website.²⁹⁰

However, Factasia.org states that it does not work for the tobacco industry. ²⁸⁹

Activities

Factasia.org conducts its activities under three main themes that it describes as: “consumer choice, rational debate and sensible regulation”.²⁸⁸ It states that “Factasia.org aims to communicate with consumers as well as politicians, legislators and appropriate law enforcement officials”.²⁸⁸ According to Tobacco Reporter, Factasia “aims to lobby on behalf of the millions of growers, distributors and retailers throughout the region whose livelihoods are under threat from bad legislation and excessive taxation” ²⁸⁹

Commissioned Surveys to Argue for Reduced Regulation

The organisation conducted several opinion surveys of smokers in Asia-Pacific markets through the polling company IPSOS. One survey conducted in 2015-2016 included responses from nine countries (Mecau, India, Malaysia, Singapore, Australia, Hong Kong, Taiwan, Philippines, and New Zealand) and over 4,200 smokers.²⁹¹ This survey evaluated awareness, use and perception towards e-cigarettes. A similar survey was conducted in Hong Kong in 2018 with 1,000 respondents.²⁹² Results of these surveys were presented in global pro-vaping conferences and used to develop support for reduced regulations and restrictions on e-cigarettes.²⁹³

In 2015, Factasia.org held an E-cigarette Symposium with speakers from the Institute of Economic Affairs (IEA). ²⁹⁴

Lobbied at COP8

Factasia has lobbied against the Conference of the Parties (COP) of WHO FCTC. Heneage Mitchell, cofounder and director of Factasia.org, was among the group who protested outside COP8 in Geneva in 2018, arguing that the WHO should accept harm reduction as a “basic human right” (Image 1).²⁹⁵²⁹⁶

Heneage Mitchell was present with Martin Cullip, a pro-tobacco blogger and Simon Clark, the Director of the tobacco industry front group Forest at a COP8 side event, hosted by the tobacco industry-funded, representing the Institute of Economic Affairs. The International Network of Nicotine Consumer Organisations (INNCO) was also present, after being denied FCTC observer status. For more information see the page on INNCO.

Image 1.”Heneage Mitchell from Factasia (second from left) was part of a group protesting outside FCTC COP8 event in Geneva, 2018 (Source factasia.org)

Lobbied COP8 via Twitter

Researchers from the Tobacco Control Research Group (TCRG) analysed Twitter data to gain insights into activity of the tobacco industry and its allies, including Factasia.org, in the run up to COP8, and their attempts to influence the FCTC.²⁹⁷²⁹⁸

The researchers concluded that:

“The extensive activity by NGP advocates with links to organisations funded directly and indirectly by PMI … as well as a substantial online presence by PMI executives themselves, suggests a strategic approach by PMI to influence COP8 debates”.²⁹⁷.

For more details see International Network of Nicotine Consumer Organisations (INNCO)

Factasia.org is a supporter of the “Smoke Free for Life” (SF4L) campaign, organised by Coalition of Asia Pacific Tobacco Harm Reduction Advocates (CAPHRA).See below for details.²⁹⁹³⁰⁰

Relationship with the tobacco industry

According to Factasia.org’s website, Philip Morris International and Tobacco Vapor Electronic Cigarette Association (TVECA),  an e-cigarette trade association, are among its supporters.²⁹⁰

Other supporters listed on their website, as of October 2020, were are:²⁹⁰

• Axiom Select LLC – Service provider to tobacco industry from machinery to services which include “regulatory issues, product development, harm reduction, cost / project management and sourcing.”.²⁹⁰³⁰¹
• Cerulean – Provider of test and measuring equipment for the tobacco industry. As a provider, it has presented at several tobacco industry events as the Global Tobacco & Nicotine Forum, World Tobacco Middle East, Tobacco Science Research Conference, among others. ³⁰²
• Moisttech – Provider of moister & measurement control products, that provides services to the tobacco industry.
• Primary Engineering (Thailand) Ltd – Provide service & maintenance for tobacco industry equipment

As stated on the Factasia.org website, its cofounder and director Heneage Mitchell has commentated on the tobacco industry across the Asia region for over 15 years.³⁰³ His LinkedIn profile states, he was the former managing editor/co-publisher at October Multimedia from 2009-2013 and managing editor of Lockwood Publications from 2002 –2009. ³⁰⁴  Lockwood publications was the publisher of industry publication Tobacco Asia.³⁰⁵.

John Boley, the other cofounder of Factasia.org was a speaker at the Global Forum on Nicotine (GFN) in 2016 and 2017. GFN is an event organised by Knowledge-Action-Change (K-A-C) which is funded by PMI-funded Foundation for a Smoke-Free World.

The panel of speakers at the Factasia.org E-cigarette Symposium 2015 included;  e-cigarette researcher Dr. Konstantinos Farsalinos, representatives of TVECA and the Asian Vape Association (AVA), and Terry Barnes representing Institute of Economic Affairs(IEA) (see image 2) ²⁸⁸. The IEA is a think tank which has a history of collaboration with the tobacco industry.³⁰⁶

Image 2: Factasia.org E-cigarette symposium held in Hong Kong in 2015. From Left: Ray Story (TVECA), John Boley, Dr. Konstantinos Farsalinos, Heneage Mitchelle , Nav Lalji (AVA) (Source: Factasia)

Staff

Heneage (‘H’) Mitchell and John Boley, are both founders and directors of the organisation.^{304 307}

According to his LinkedIn profile, Mitchell became Managing Director of factasia.org in October 2013, after working in journalism, publishing and other businesses, including writing on tobacco (see above for details). ³⁰⁴ He states that his specialities include public relations and campaign management.³⁰⁴ and in 2017.³⁰⁸ His presentation in 2016 was titled “Developing a united front for consumers to public health authorities in Asia-Pacific – challenges and opportunities” and, in 2017, “The lexicography of harm reduction”.³⁰⁹

Lobbying decision-makers

Collaborating with third party organizations and funding their activities in order to reach out to decision makers is one of the most common tobacco industry tactics.(See Third Party Techniques) Factasia has not been the exception, as evidenced in the promotion of  looser regulations for newer products in Australia:

Lobbied Therapeutic Goods Administration (TGA)

Regarding PMI´s IQOS, Factasia made a submission in June 2020, after the Australian medicines regulator, the TGA, made an interim decision refusing Philip Morris Ltd application to exempt its IQOS product from the Poison’s Schedule. Factasia´s submission argued that “It is unconscionable that Australia continues to ignore the evidence and is now seeking to further restrict access by adult smokers to these life-saving technologies by considering legislation to require a doctor’s prescription to purchase nicotine-containing vape products.” ³¹⁰ Despite intense lobbying by PMI to allow the sale of IQOS, in August 2020, the Australian government’s Therapeutic Goods Administration rejected the sale of HTPs in Australia.³¹¹³¹².

Lobbied Australian parliament:

After lobbying with CAPHRA for fewer restrictions on e-cigarettes in Australia, in summer 2020,³¹³   Factasia made a formal submission to the Australian Parliament on October 16, 2020, arguing that “The government has a unique opportunity to act for the good of its citizens by recognizing that harm reduced nicotine products save lives and benefit all Australian citizens by reducing the death and disease caused by smoking. Smokers need to be able to access the life-saving technology of harm reduced nicotine products. This should be a key part of Australia’s Tobacco Control policy”.  ⁷⁹ Furthermore, Factasia lobbied for newer products to be legalized in Australia and regulated differently than tobacco products. ⁷⁹

Partnerships

Factasia.org is associated with the Coalition of Asia Pacific Tobacco Harm Reduction Advocates (CAPHRA)³¹³  and supports its SF4L campaign.²⁹⁹ Heneage Mitchel was at the launch of SF4L, along with Peter Paul Dator, president of Vapers PH; Clarisse Virgino, the CAPHRA Philippine representative; and Nancy Loucas, executive director of CAPHRA (see image 3 below).^{314 300}

Image 3: (from left) Peter Paul Dator, president of Vapers PH; Clarisse Virgino, the Philippine representative to the Coalition of Asia Pacific Tobacco Harm Reduction Advocates; Nancy Loucas, executive director of CAPHRA; and Heneage Mitchell  at the Asia-wide education and information campaign #SmokeFree4Life in Poblacion, Makati City.

Relevant Link

Factasia.org

Tobacco Tactics Resources

• Global Tobacco and Nicotine Forum
• Next Generation Products
• Philip Morris International
• Lobbying Decision Makers

TCRG Research

Robertson, A. Joshi, T. Legg T, et al., Exploring the Twitter activity around the eighth meeting of the Conference of the Parties to the WHO Framework Convention on Tobacco Control, Tobacco Control Published Online First: 11 November 2020, doi: 10.1136/tobaccocontrol-2020-055889

Stopping Tobacco Organizations and Products, Tweetable Influence: The Tobacco Industry’s Attempt to Engage in COP8, STOP blog, 12 November 2020, available from: exposetobacco.org

References

The post Factasia appeared first on TobaccoTactics.