Imagine a global distilling company bankrolling a comprehensive multi-media campaign directed at teens, purportedly designed to convince them that alcopops and binge pre-loading with vodka disguised in fruit juice were dangerous, even deadly activities. Meanwhile, the company aggressively promotes alcopops, pleading that lots of adults like the sickly sweet drinks too.
Then enter a major manufacturer of gaming machines offering doctors incentives to refer problem gamblers to support groups, against the reality that revenue from poker machines is dominated by people with life-destroying gambling problems and implacable industry opposition to reforms that in any way seriously threaten that income stream.
Well, right now we have a third example that requires no hypotheticals, but only the 10,000 watt searchlights of duplicity focussed on the activities of Philip Morris International (PMI), the world’s second largest tobacco company after the Chinese National Tobacco monopoly.
In 2023, PMI manufactured 612.9 billion cigarettes globally. It also sells several nicotine delivery products it promotes as “alternatives” to smoking. One of these is the vape VEEV. Its marketing staff have been extremely busy trying to get VEEV stocked by Australian pharmacies so that staff will supply it to those wanting to buy vapes from Oct 1, 2024 when pharmacies will be able to sell them to anyone aged 18 or over without a prescription.
So what’s the problem here? Why does it matter that smokers might be channelled to get a tobacco company product instead of one sold by companies with no tobacco industry connections?
If you instinctively recoiled at the two parallel examples I started this blog with, then you already know the answer. Just as we know that a wealthy drug dealer putting $5000 in the church plate each Sunday, does not wash clean the source of his weekly charity, a tobacco company posturing as a solution to the problem they continue to cause is literally sickening. But let me spell it out.
Over the last few years, PMI has been telling everyone that it wants to “unsmoke” the world. It says it wants those who smoke to stop smoking and switch to its alternative nicotine delivery systems. It has even gone further, saying that they want their customers to stop using all forms of nicotine: “To be clear, PMI’s core message is: For adults who use nicotine in any form it is best to quit completely.” Here, we are meant to believe that the company wants its cigarette customers to stop smoking and switch to its non-combustible nicotine products. But it says it also wants even these customers (“it is best”) to also quit these. This sounds as credible as a motor vehicle company urging owners of its petrol-powered vehicles not just to switch to its fully electric models, but to also then abandon those and not own cars at all. Only a tobacco company could have the weapons-grade gall to make such a statement publicly, even in our increasingly post-truth world.
Dual use: the motherlode reward for Big Tobacco
The industry’s public pitch is that smokers should switch from cigarettes to the non-combustible products. But the reality is that dual use (smoking and vaping, not smoking instead of vaping) is the motherlode of rewards for Big Tobacco here.
In 2018, British American Tobacco’s (BAT) then boss Nicandro Durante said that dual use had become not “a”, but “the key consumer dynamic” for his company, growing from 13% to 23% in less than one year. A BAT presentation identified most popular “new occasions” for e-cigarette users were “when I can’t smoke cigarettes (86%), “in the car” (62%) and “inside pubs and restaurants (47%). In a 2019 presentation to investors, BAT emphasised that dual and poly-using next generation product (NGP) users were of vital importance to its mission. Sixty five per cent of vapers and 55% of heated tobacco product users were dual users at the time.
All tobacco companies know very well that their bread will be buttered far more by the pursuit of dual use and multiple nicotine delivery system use than by just concentrating on cigarettes. Their clear objective is to maximise sales of all of their addictive products.
No tobacco company has set a date to end cigarette manufacturing
All transnational tobacco companies have lost no time investing heavily in the development and marketing of vapes. Some of these companies have made statements that they hope to one day stop selling combustible tobacco products. But tellingly, unlike the car manufacturing industry where companies are lining up to announce dates for them to stop manufacturing fossil-fuelled cars, no tobacco company has set a target date for the end of cigarettes. And just as tellingly, they continue to do all they can to maximise cigarette sales and as they’ve done for 70 years, thwart any evidence-based government policies which seriously threaten to put a brake on the uptake of smoking or accelerated quitting.
Far from turning off its efforts to produce and market cigarettes, PMI continues to expand its cigarette business wherever it can. For example, in March 2018, PMI opened a new factory in Tanzania with capacity to produce 400 million cigarettes a year “to cater for the local and international market.”
In June 2022, PMI launched a new cigarillo brand Chesterfield Leaf, using a tax loophole that saw the brand priced below all cigarettes in New Zealand. This is the action of a company seeking to retain and attract smokers — particularly those on low incomes including kids — not one that would drive them away from smoking.
In Indonesia the world’s fourth most populous nation with huge rates of male smoking and feeble tobacco control, PMI owns the Sampoerna cigarette company but local sales of its IQOS heat not burn product are very small.
Gaprindo, the white (non kretek) cigarette manufacturers association in Indonesia, represents the interests of transnationals like PMI, BAT and JTI (Japan Tobacco International). Gaprindo routinely lobbies to oppose tobacco control policies like tax increases, as does the tobacco industry globally.
PMI’s 2023 third quarter report to investors on its global results highlighted $US9 billion in quarterly net revenues for the first time. Its CEO emphasised “resilient combustible trends”, barely coded words meaning that its cigarettes were still selling the house down. He did not suggest this was unfortunate, regrettable or a problem.
This is spelt out very clearly by PMI’s numbers. The Motley Fool summed it up this week “Let’s not forget the profitable legacy cigarette business, which is still generating boatloads of cash flow. Due to Philip Morris International’s exposure to emerging markets, volumes are actually stable for the segment. Cigarette volumes declined by just 0.4% last quarter, which the company can make up for through price increases.”
That stability in cigarette volume can be simply put as: for every (western) smoker that PMI magnanimously ‘unsmokes’, they are replaced by a newly recruited cigarette smoker from Africa, the middle east or Asia.
PMI makes substantially more profit (about double) from heat-not-burn products than cigarettes, thanks to lower tax rates (or triple the profit if you are on a friendly basis with the Associate Health Minister, as we saw in New Zealand recently).
All tobacco major tobacco transnationals are fervently opposed to the pharmacy-only access policy just passed into law in Australia. They have always wanted vapes to be categorised as “consumer products” not subject to the restrictions of therapeutic goods regulations, like pharmaceuticals. The setback they will now experience with pharmacy-only access in Australia will be seen as policy they would like to smash quickly before it spreads globally. This has been their playbook with all effective tobacco control policies.
Becoming a participant in the supply of vapes provides tobacco companies with opportunities to use their massive resources to engage in anti-competitive behaviour by blowing all competition out of the game via deals they strike with pharmacists. Over a year ago, The Guardian reported that Philip Morris was offering Australian pharmacists an 80% margin on VEEV, trying to lock them into deals where the VEEV device would sell for $19.90 and two pods at or below $14.90. This was said to be below cost and cheaper than pharmaceutical wholesalers could supply comparable products.
The Australian Competition and Consumer Commission needs to be keeping a very watchful eye on any such possibly anti-competitive conduct, and hitting any company found to be engaging in this with brutal, deterrent penalties.
In March this year The Guardian reported that the Therapeutic Goods Administration was investigating four vaping telehealth “prescription mills” which includes cases where companies using doctors were allegedly providing prescriptions to particular branded products. With prescriptions no longer needed for vapes containing nicotine concentrations of 20mg/mL (these can be purchased via such vapes “under-the-counter”) prescriptions will only be needed for concentrations above 20mg/mL and up to 100mg.
Non-combustible nicotine delivery systems owned by tobacco transnationals
So if you are a pharmacist (or a vaper) who wants nothing to do with helping the profits of a tobacco company, here is a list of some non-combustible inhalable nicotine brands now being sold around the world by tobacco companies.
Philip Morris International: IQoS, VEEV, lil
British American Tobacco: Vuse, glo
Imperial Brands: Blu, Pulze
As one vaper put it on Reddit …
The Thoracic Society of Australia and New Zealand recently cut all ties with Mundipharma, a pharmaceutical company specialising in asthma medications, after Mundipharma struck a deal with Vectura, a Philip Morris subsidiary selling asthma drug inhalers. This followed a January 2022 statement from the Forum of International Respiratory Societies about the takeover of Vectura by Philip Morris. The President of the European Respiratory Society stated “the takeover is a dark time for respiratory medicine and this development represents an incredible blurring of the lines, whereby a company may now profit from the medicines used to treat the illnesses that its products cause.”
By entering the therapeutics market, Philip Morris would have its eyes on the prize of a strategic seat at the tables of health regulatory bodies where it would hope to rebirth itself as a “wellness” company, providing air cover distraction from its on-going tobacco sales. It would also hope to leverage disruption of the policy rollout of the WHO’s Framework Convention on Tobacco Control (FCTC), the global blueprint for reducing tobacco use and the tobacco industry’s interference in that effort. This 2017 major Reuter’s report on Philip Morris’ plans to block and weaken FCTC treaty provisions makes this explicit.
Will it be long before tobacco companies cynically invest heavily in hospices, palliative care, crematoria, funeral services and catering for wakes? Nothing should ever surprise us about this industry.
Simon Chapman AO 