Perspectives from GFN24 – Day 3

Do you even carto, bro?

The vape market is unrecognisable from what it was when Planet of the Vapes came into being; the products and the players have almost all changed.

Vivien Azer, a Wall Street financial analyst specialising in the tobacco, nicotine and cannabis industries, opened in the session looking at how tobacco harm reduction has influenced the market to date and will continue to do so in the future.

“The outlook is for the disruption from novel nicotine products to accelerate, because the major public tobacco companies are incentivising consumers to move away from higher risk combustible cigarettes.”

“If you strip out China, the major public companies account for the vast majority of the total nicotine marketplace. They are in a position to drive change in consumer behaviour. They're already talking to the core, combustible cigarette smoker and controlling close to two thirds of that market - PMI being the market leader with over 28% share, and BAT a very close second.”

“These significant changes for global tobacco companies reflect an understanding that consumers really are wanting to shift to reduced risk products, but it's also an acknowledgment that they were operating in an industry that was in structural volume decline.”

“Three watch outs for the US - number one, the menthol ban, although it doesn't look like anything will happen in an election year. Two: the modern oral category is coming under increased scrutiny, given the category’s growth, driven by Zyn. Lastly, the very low nicotine cap introduced by Scott Gottlieb in 2017 under the Trump administration. This is a really disruptive policy change that ultimately could shake up the US industry.”

And there was an indication that business pressure may be brought to bear in the UK.

“The structural volume decline [in combustible cigarettes] ultimately also informed the expansion into the cannabis category; four out of the Big Five public companies have made some kind of investment, which vary in terms of size and scope. From a financial standpoint, Altria is the most notable. PMI, BAT and Imperial seem to be more IP focused, looking for synergies, namely across the vapour sector. But the regulatory evolution of cannabis happens in fits and starts and in the cannabis market, things tend to happen a lot more slowly than the investment community would have expected.”

From tobacco products to pods, pouches and spliffs in the UK too?

Azer went on to deliver a company-by-company analysis:

• PMI – aiming for 2/3 of income to come from non-tobacco products by 2030
• BAT – ambitions are more limited than PMI and will continue punting tobacco for longer
• ALTRIA – aims to double smoke-free income by 2028, but selling Juul is an odd way to go about it
• JTI forced into heat-not-burn by the home market, but are selling a higher heat-not-burn product
• Imperial – aiming at the budget end of the European market

Jonathan Fell, a tobacco and nicotine sector consultant, said that the ambitions for tobacco companies to move into safer products doesn’t exist for those who operate in captive markets or are part/completely owned by their governments.

“State-owned companies have often not faced pressure to change,” he said.

“Transformation of the tobacco industry has the potential to bring tremendous public health benefits. And yet it's often viewed with suspicion by the public health and tobacco control communities. Maybe this is because it's market-driven, and not a top-down health initiative of the sort that they might be more used to supporting - ‘not invented here’ syndrome, you might call it.” 

David Sweanor, professor in the Faculty of Law at the University of Ottawa, summed up how the future will go in the medium to long term.

“Look at international laws on narcotics,” he cited as an example. “As society has moved on, consumers simply ignored what the laws were in various countries. Eventually, in many places, we’ve ended up legalising marijuana - completely counter to these international treaties that governments had signed. And these treaties are more powerful than the Framework Convention on Tobacco Control.

“Good policy is contagious. Consumers will be ahead of the regulators in most markets - and in all of these places, it will be people like law enforcement who argue that they have better things to do than go and find out if people are using a product that’s less hazardous than cigarettes.” 

Evidence? What evidence?

During a panel discussion on evaluating the difference between good and bad science, all-round expert Clive Bates spat: “Maybe five years ago, one Californian crank was willing to say that vaping and smoking are equally dangerous. Now it's a very common trope in the academic world.”         

From a situation where ‘we don’t know enough about them’, we now live in an age where there are a bewildering number of studies released every week – and most of them are hopeless.

“Unless the trial is set up to represent the real world phenomenon, which is an economic marketplace, disturbed by regulation in that case, then it's not actually measuring or examining the thing that you are interested in scientifically,” Clive said.

“There's a lot of alarmism about dual use [of cigarettes and safer products], but it's based on statistical tricks - the dual users might be different kinds of people and might be more dependent, so  in the way that some of these things are compared, if you compared all dual users with non-dual users, you might find that they're consuming more nicotine and more toxicants, but if you compared one dual user over time, going from smoking to dual use, you'll see a different picture. So it depends how you actually examine these things.”

“There's been an amazing change in the rate of cigarette consumption in Japan. Are the skies of Tokyo dark with the planes of tobacco control researchers flying into Narita Airport to study that? No, they are not. They're not interested. Same with the snus experience in Sweden. [They] don't want to study that in detail, with a few honorable exceptions. There's very little interest in New Zealand and the incredible experience that's been achieved with Maori smoking, but there's a lot of upset about some endgame measures that have been cancelled by an incoming government.”

Clive rounded off by adding: “Medical societies, the professional bodies, the activist groups, they're all creating a cultural environment that is hostile to tobacco harm reduction, and the science to some extent is reflecting that environment and the norms that are being established in that environment.

“In politics, emotional empathy counts for a great deal. So never ever feel that you can't compete in a world of claims that are scientific because if you've been a vaper, you have direct experience, and that counts in a big way in politics.”

Dave Cross

Journalist at POTV

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Dave is a freelance writer; with articles on music, motorbikes, football, pop-science, vaping and tobacco harm reduction in Sounds, Melody Maker, UBG, AWoL, Bike, When Saturday Comes, Vape News Magazine, and syndicated across the Johnston Press group. He was published in an anthology of “Greatest Football Writing”, but still believes this was a mistake. Dave contributes sketches to comedy shows and used to co-host a radio sketch show. He’s worked with numerous start-ups to develop content for their websites.