In Addition to Offsetting Reduced Cigarette Volumes, E-cigarettes Might Help Tackle Illicit Trade (I)

Source from:  Tobacco Reporter  10/11/2013

Toward the end of July, British American Tobacco (BAT) reported that its cigarette volume during the six months to the end of June, at 332 billion, was down 3.4 percent on that of the six months to the end of June 2012.

But the company wasn't alone in reporting reduced volumes in July. Philip Morris International, Japan Tobacco and Japan Tobacco International all reported falls during the three months to the end of June, year on year. And earlier, Imperial Tobacco had reported a fall in volumes in its first six months to the end of March, year on year.

I started looking at these figures because I was trying to work out why BAT had included on its website at the end of May a piece titled, "What would a world with no legal tobacco industry really look like?" In the first paragraph, Kingsley Wheaton, BAT's group head of corporate and regulatory affairs, "warned": "The reality is that people will continue to smoke. But instead of buying legal, taxed cigarettes, made by legitimate tobacco companies and sold by reputable retailers, they'll turn to black-market sources to get what they want."

It is easy to sympathize with the frustration felt by a highly regulated company competing against unregulated suppliers. But surely it is wrong to suggest that if the production of leaf tobacco and the manufacture of tobacco products were made illegal worldwide, these activities would be taken up by crimi-nals on anything approaching the scale of current production and manufacture.

Feeding the current demand for licit cigarettes on a global basis takes a huge quantity of leaf tobacco to be grown and cured, and, to me, it is inconceivable that such an amount could be produced clandestinely, even given that the authorities in some countries turn a blind eye to this activity. Indeed, for obvious reasons, if the world's current cigarette demand were to be met by the illicit trade, the amount of leaf tobacco needed would be greater than the current requirement.

Also, given that there was no legal production of cigarette paper and, especially, acetate filters, it would be hugely difficult for criminals to obtain the quantities of these materials that would be needed. At the same time, it would take an enormous manu-facturing base to produce the equivalent of current demand plus seizures, since cigarettes would have to be produced on low- and medium-speed machinery, and since reputable tobacco machin-ery parts suppliers would have disappeared.

But the clincher is the nature of cigarette consumption. Most cigarette consumers need to smoke on a regular basis during the day, and that would be nigh on impossible without detection in the case of most people. And the detection of illicit cigarettes would be rendered simple for police and customs officers because any cigarette would be illicit.

As I say, it is easy to understand the frustration caused by the huge trade in illicit cigarettes, and many people will have applauded BAT in May when it announced the appointment of Sir Ronnie Flanagan, the former U.K. Home Office chief inspector of constabulary, as its new external consultant and advisor on tack-ling illicit trade. But there is no point in trotting out the old argu-ments about organized crime, links to terrorism and, especially, animal excrement in illicit cigarettes. The punters—the people who create the demand—didn't listen to these arguments in the past and they aren't going to listen to them in the future.

It is, instead, important to understand what creates the condi-tions in which the illicit trade can survive, and to work out inno-vative ways of overcoming it. It is indefensible, in my view, for governments, in the full knowledge that smokers are addicted to their habit, to use taxation purposely to raise the price of cigarettes to a level where some smokers cannot afford them and then pros-ecute these unfortunates for buying what they can afford.

Betting on harm reduction

So what's the answer? I don't know, but one thing I do know is that governments aren't going to change their taxation policies. Also, it is possible that Wheaton's piece provided an answer of sorts when he said that BAT made significant investments in research and development of reduced-risk tobacco products.

This is true and commendable. BAT has, for a long time, been putting a huge effort into advanced research in tobacco products and, importantly, into trying to have its research results published in respected scientific journals. As long ago as May 2009, the com-pany announced that it was recruiting 250 volunteers in Germany to test experimental cigarettes designed to produce less toxic smoke than is produced by conventional products.

The next year, it opened the first phase of its redeveloped research facilities at Southampton, on which it had spent three years and £17 million ($26.54 million). And toward the end of 2010, the company announced that a study of twins had revealed markers of biological effects that could form the basis of a database useful in assessing new products designed to reduce risk.

In April 2011, BAT reported that it had used an enzyme in a novel process to reduce levels of certain toxicants in tobacco smoke—and this research was published in  Food and Chemical Toxicology . And more success was to follow. In July 2011, the company announced that, jointly with LGC, the U.K.'s National Measurement Institute for chemical and bio-analytical measure-ment, it had developed a technique that, for the first time, allowed the identification of different forms of arsenic in smoke and tobacco. And at about the same time, it said that it had developed a novel, synthetic active carbon that had been found in laboratory tests to be twice as effective as standard carbon filter material was at adsorbing toxic volatile compounds from cigarette smoke.

Then, in April 2012, BAT announced that its Group Research and Development (GR&D) Centre had become the newest mem-ber of the Scientific Advisory Panel of the Institute for In Vitro Sciences in the U.S., a recognized leading provider of in-vitro test-ing in support of toxicological safety evaluations. In August of the same year, the company released the results of a study showing that the maximum absorption of nicotine from snus was greater than that from a cigarette or an over-the-counter nicotine chew-ing gum. And the following month, it was talking about a novel technique developed by its scientists that had made it possible to weigh the amount of smoke people were likely to be exposed to when they took a puff of a cigarette, and about a bone protein that had shed some light on the development of cardiovascular disease in smokers. By November, a research review by scientists at BAT had suggested that the regulatory functions and inherent stability of microRNAs made them suitable biomarker candidates for early detection of the molecular and genetic changes associated with smoking-related diseases. Enditem