ASH Daily News for 26 July 2019
- Study: Tobacco companies raise prices more than required by tax changes, despite claims
- Legal age for purchasing tobacco products should be raised to 21, experts say
- Imperial Brands makes £75m foray into cannabis
- Philip Morris launches first IQOS Africa store to spark demand for the heated tobacco product
- US: Lawmakers grill Juul over efforts ‘targeted at schoolchildren’
Link of the week
- Advancing our health: prevention in the 2020s
Study: Tobacco companies raise prices more than required by tax changes, despite claims
Tobacco companies have increased their prices by more than is required by tax changes, undermining the industry’s own central argument against increasing taxes on cigarettes. Lobbyists for cigarette firms have argued against rises in taxes, claiming that they will make their product too expensive, pushing smokers towards fake and illegally imported tobacco. This, the industry has claimed, actually reduces tax revenues and makes consumers less safe than if they smoke legal tobacco.
But research published today, 26th July, by researchers at the University of Bath and King’s College London found tobacco companies regularly increased their prices beyond what has been required by government. The authors said this shows that the companies’ claim that they are concerned about high prices prompting consumers to switch to the illicit market is questionable. They suggest that, if this was the driving concern behind calls for lower cigarette taxes, companies would have tried to ensure their own share of tobacco prices was kept low.
However, before 2010 in Britain and Ireland, almost 50% of the total price increase of tobacco products came from companies themselves, not taxation, the study found. Between 2010 and 2012, when there were large tax increases, industry-driven price changes were small, accounting for between 16% and 20% of the price increases. But from 2013 to 2015, when tax increases were smaller and more predictable, a third of the price increase for manufactured cigarettes was industry-driven, rising to nearly half 48% of the price hike for roll-your-own (RYO) tobacco. This was despite there being higher levels of illicit trade for RYO products.
Dr Rob Branston. from the University of Bath. said: “If the tobacco industry was really concerned about higher prices driving the market for illicit tobacco, they would only increase their prices whenever they were forced to do so by higher taxes…the industry has a track record of going beyond tax rises when it comes to price increases in order to enhance their profits.”
Source: The Indepedent, 25 July 2019
Tobacco Control: UK tobacco price increases: driven by industry or public health?
ITV: Tobacco industry increases prices beyond tax change requirements – study
The Sun: Price of cigarettes and tobacco hiked by up to 50% more than necessary by tobacco industry
Daily Mail: Tobacco industry increases prices beyond tax change requirements – study
Legal age for purchasing tobacco products should be raised to 21, experts say
Campaigners are calling on Boris Johnson’s new government to raise the age of sale for tobacco products from 18 to 21 in order to reduce levels of youth smoking following new research from Yale School of Public Health published this week. The move is vital, the campaigners say, if the Government want to achieve their ambition of a smokefree England by 2030.
This follows calls earlier in the year from doctors and MPs to increase the age of sale “to discourage uptake by those most at risk.” The study published this week by Yale researchers adds weight to the evidence supporting raising the legal age of sale and found such a measure was associated with a 39% reduction in the odds of social smokers becoming regular smokers.
The reduction was even greater (50%) in those who had close friends who smoked when they were 16. Lead author, Dr Abigail Friedman said: “…the reduction was larger among young people whose friends were likely to smoke before tobacco-21 laws were adopted. As peer smoking is a critical predictor of youth smoking, this study suggests that tobacco-21 laws may help reduce smoking among those most susceptible. This result supports raising the age of sale to 21 as a means to reduce young adult smoking and improve public health.” As of June this year, 16 US states and more than 400 localities in the US have raised the age of sale of tobacco to 21.
Deborah Arnott, chief executive ASH said: “Almost no-one starts smoking after the age of 21, and not starting is much easier than quitting. Increasing the age of sale to 21 is a key step towards achieving the Government goal of ending smoking by 2030. Smoking is a lethal addiction with two thirds of those experimenting with cigarettes going on to become regular smokers, and only one in three successfully quitting in the long-term.”
Source: The Sun, 25 July 2019
The Sun: Ban sale of cigarettes to under 21s to save young adults’ lives, MPs and doctors demand
All Party Parliamentary Group on Smoking and Health – Delivering the vision of a ‘Smokefree Generation’: The APPG on Smoking and Health’s response to ‘Prevention is better than cure’
Imperial Brands makes £75m foray into cannabis
Imperial Brands, the Bristol based tobacco company, has made its biggest investment yet in the cannabis sector with a £75 million deal to take a stake in Canadian company Auxly Cannabis Group. The deal, announced on Thursday 25th July, allows Imperial to convert a £75m debenture into a 20% stake in Auxly over three years. It gives the tobacco giant positions on the cannabis company’s board in return for offering Auxly access to its vaping technology business, Nerudia.
The legal cannabis market in Canada is estimated to be worth $6bn, according to Ernst & Young, and is forecast to increase to $11bn by 2025 following regulation due in October this year to legalise edible cannabis products, as well as cannabis oils, lotions and vaping. Vaping is expected to be the fastest-growing sector in alternative cannabis products.
Last year, Imperial made its first foray into the sector when it took a small minority stake in the cannabis-focused biotech company Oxford Cannabinoid Technologies. It has also appointed Simon Langelier, a medical cannabis expert, to its board. In May 2019, Imperial dropped its longstanding dividend target in order to fund further investment in tobacco alternatives such as cannabis and caffeine.
Source: Financial Times, 26 July 2019
Philip Morris launches first IQOS Africa store to spark demand for the heated tobacco product
The South African unit of cigarette maker Philip Morris International Inc (PM.N) opened its first flagship store in Johannesburg, South Africa on Thursday 25th July, as it tries to grow demand in Africa for its alternative heated tobacco product IQOS.
The store in Sandtown, a recognised business hub in South Africa, gives Philip Morris access to tourists and business people who frequent Africa’s richest square mile, allowing it to use its retail footprint as a springboard to expand in the rest of the continent.
South Africa is the first and only market in Africa where Philip Morris sells IQOS, an acronym for “I quit ordinary smoking.”
Source: Reuters, 26 July 2019
US: Lawmakers grill Juul over efforts ‘targeted at schoolchildren’
E-cigarette maker Juul Labs Inc funded a “holistic health education” summer camp as part of efforts to market directly to school-aged children, members of a U.S. congressional panel said on Thursday 25th July, citing internal company documents.
Democrats on a subcommittee of the House of Representatives Committee on Oversight and Reform released a cache of internal Juul emails and other documents that committee staff described as early attempts to “enter schools and convey its messaging directly to teenage children.” Juul’s use of social media influencers to promote its vaping devices in the years after it launched in 2015 also came under scrutiny. James Monsees, Juul’s co-founder and chief product officer, told the committee that the company’s target audience from the beginning has been adult cigarette smokers.
Among efforts cited in the Juul documents released was a $134,000 payment to set up a five-week “holistic health education” summer camp at a Maryland charter school, recruiting children from third through 12th grades (ages 8-19), and offering $10,000 to schools using the company’s “youth prevention and education” programs for students, including those caught using e-cigarette products. In a statement after the hearing, Juul said the $134,000 donation was to “facilitate already-existing community outreach and youth-prevention programmes,” and said the company “did not have any direct interaction with the students.”
Source: Reuters, 26 July 2019
Link of the week
Advancing our health: prevention in the 2020s
On Monday 22nd July, the Department for Health and Social Care and the Cabinet Office published the Prevention Green Paper: ‘Advancing our health: prevention in the 2020s’. The consultation document sets out a number of commitments and proposals for consultation aimed at the prevention of ill health. Notably, these include:
• An ambition to make England ‘smoke-free’ by 2030
• Being open to ideas for funding tobacco control measures, including raising funds under the Health Act 2006 and a ‘polluter pays’ approach requiring tobacco companies to pay towards the cost of tobacco control
• The possibility of mandating packaging inserts in tobacco products giving quitting advice
• A commitment to a call for independent evidence to assess how effective heated tobacco products are, or are not, in helping people quit smoking and reducing health harms from smoking
• A commitment to develop and launch a new Composite Health Index which will provide a visible, top-level indicator of health, that can be tracked alongside our nation’s GDP. It will measure changes in health over time and, along with other indicators, can be used by the government to assess the health impacts of wider policies
• A commitment to further proposals for making England smoke-free that will be set out at a later date
The publication of the Green Paper marks the beginning of a consultation process on its proposals. This will end at 11:59pm on October 14th 2019.