Thursday, 16 May 2019

It's time for Health Canada to clamp down on vaping ads

Almost a year has passed since the federal government opened the door for tobacco companies to begin to sell vaping products in Canada. (Until May 23, 2018 it was illegal to sell recreational nicotine devices in Canada).

It wasn't long before vaping among kids was recognized as a public health crisis. Principals took the doors off washrooms. Parents wrote letters to government. Public Health Units spoke with alarm.

What hasn't happened yet is a clamping down on the types of marketing that are driving the youth vaping epidemic. Health Canada has said that they want to put new regulations in place, but they won't have time to do so for another year or so. Groups like ours want the law to be strengthened to remove all advertising, but with an election around the corner and bills piled up in Parliament, this is not going to happen soon either.

So what is to be done? For a start, a stricter application of the current law would lessen the volume and the harmfulness of the ads that are now in circulation.

PSC has identified four important areas where the Tobacco and Vaping Products Act could be enforced, but is not. They are:

Youth appealing designs. 
Health Canada is not enforcing the ban on vaping devices whose design is appealing to young persons. (S. 30.41) Enforcing this restriction would remove from the market those products (like JUUL) which are driving the youth vaping epidemic.

Misleading advertising
Health Canada is not enforcing the ban on promotions which create a general impression that the products are less harmful than they are. (S 30.42(1-2). Echoing Supreme Court decisions on the need to protect inexperienced consumers, the Quebec Court of Appeal recently ruled that the absence of appropriately detailed and prominent health warnings on tobacco promotions is a form of misleading advertising. Enforcing this restriction would remove advertisements, brand activations and social media posts where warnings do not meet the standards established by court.

Lifestyle advertisements
Health Canada is not enforcing the ban on advertisements which communicate risk and daring, aspects which trigger the ban on ‘lifestyle advertisements’ in the law (ss 2 and  30.2). Current vaping products make direct and indirect appeals to the significant risks associated with nicotine use. A strong enforcement of the ban on lifestyle advertisements would remove most advertisements.

Testimonial advertisements in exchange for gifts or money
Health Canada is not enforcing the ban on the use of testimonials and endorsements in vaping advertisements. (S. 30.21(1). Vaping companies are engaging young people as brand activators, distributors and social influencers to promote vaping devices through face to face and on-line contact, often in exchange for gifts or money, a practice which is also contrary to the TVPS (s. 30.6). Enforcing these restrictions would protect young people from this commercialized peer pressure.

Want to know more?  Our backgrounder can be downloaded here!

Monday, 6 May 2019

The first one is free.... Imperial Tobacco gives away its addictive Vype product

To be polite, let's use the term 'ironic' to describe what took place in the same neighbourhood and at the same time that Imperial Tobacco was seeking court protection from having to compensate smokers for having misled them about the health effects of smoking in the 1950s through 1990s.

On Toronto's bustling Queen Street on April 25th -- only a few hundred metres from the University Avenue Courtroom where they were facing down the desire of the Ontario government to continue its suit against them --  Imperial Tobacco was seen clearly using the same fear-assuaging marketing playbook to market vaping devices as it had previously done with cigarettes. On this afternoon the door to its Vype van was wide open as the company invited passersby to enter, sign up and register to receive a free samples of its addictive nicotine vaping device.

Vype promotion truck
Queen Street near University Avenue
Thursday April 25, 2019
A "general impression" of fun? Yes

It would be hard, but not impossible, to miss the warnings on the door and side panel of the customized truck that was parked on the north side of Queen Street that day. But it would be equally hard to pay them much attention. From only a few feet away, the print was too small to read, and against the dramatic truck design there was little attention to spare. Besides, who has time to stop and read on Queen Street?

Far more inviting than the warnings was the open rear door of the truck and the steps that led inside.A group of twenty-somethings had created a cosy and convivial atmosphere. Everyone was waiting to sign up and receive a free starter kit of the Vype ePen3, including two of its new nicotine flavour cartridges. Unlike the previous flavoured nicotine pods marketed for this device, the ones being offered for free this day are made with the more powerful (and addictive) nicotine salts.

As I waited my turn, I had a chance to watch the two enthusiastic hosts behind a desk at the cab-end of the truck space. They carefully asked each visitor for proof of age, and noted the name and age of each in a log book. Dozens of pages of names had been recorded before mine was added to the list and I was invited to use an i-Pad to enter my name and mailing address.

The atmosphere in the truck was one of  laughter and camaraderie -- the two black men ahead of me got fist bumps and hugs as they left. Any comments I overheard about the vaping products being promoted were related to the flavours, colours and the time expected before delivery.

When my time came to talk with the hosts, I learned that they were hired as "brand ambassadors" and that their truck would be moving around Toronto for the next several weeks, giving away free Vype vaping devices as well as samples of two new flavours recently introduced for this device - both of them using nicotine 'salts'.

I did not ask about and they did not mention any risks (or benefits) of vaping nicotine. In response to my rambling questions about the differences between this product and the others I had heard about, like JUUL or the Vype e-pod, I got very little information but lots of big smiles.

A "general impression" of harm and addiction?  No.

The young men who invited me to receive my first free nicotine vaping device may have gone home thinking that their job complied with the law. They had, after all, made sure that everyone's age was verified. They had not made any health claims. They had were working in a truck that had a health warning, and sharing printed material that also contained a warning that the product "may be harmful to health" and that it contains "nicotine which is addictive."

But the experience of being invited to join the crowd in the truck and sign up for a free sample was like déja vu all over again - a blast to the 1970s past when cigarette companies put small warnings on the side of packages while they used promotions that discouraged consumers from thinking too hard if at all about the health risks.

The Quebec courts have now made clear that manufacturers must meet higher standards in their duty to warn. They have now established that advertising which is inconsistent with health warnings is a form of misleading advertising in the laws of that province. The responsibility of manufacturers to warn is summarized paragraph 227 of Justice Riordan's 2015 ruling. The Appeal Court confirmed these and, like Justice Riordan, established that lifestyle advertising was a form of misleading advertising, as it marketing practices that aimed to undermine knowledge of the risks was a form of misleading advertising as they conceal the harmful and toxic effects of the products. Even with health warnings, ads could be misleading, said the Appeal Court, if they do not counter the "general impression" that is left by the promotion that the products are less harmful than they are. This new standard of what the general impression to a credulous and inexperienced consumer is a test that has been set by the Supreme Court of Canada.

Among the many Canadian laws which prohibit deceptive advertising is the new federal Tobacco and Vaping Products Act, (TVPA) which bans promotions that are likely to give a general impression that is "erroneous" about the health effects or health hazards. (s. 30.42).

It is hard to see how Health Canada can fail to link these events, and shut this Vype promotion down as leaving an "erroneous" "general impression" about the likelihood of addiction and harm that would be received by the "credulous and inexperienced purchaser."

Brand ambassadors, testimonials and other 'considerations'.

But if that is not enough, there are other ways in which the Vype truck promotion likely runs afoul of other sections of the TVPA.

This law says that companies cannot give vaping products away in return for a service. (s. 30.6) Yet on this past Thursday, the devices were only given away in return for the service of registering in their data base. In a data-driven marketing economy, the provision of one's name and address can only be seen as a consideration.

The law prohibits the use of testimonials or endorsements -- "however communicated" (s. 30.21) It's hard to see the role of  brand ambassadors and social media influencers as anything but endorsements. The encouragement and physical contact given by these charming young men for people to enter their names into Imperial Tobacco's marketing data base in return for a free device was an endorsement communicated most personally,

A blind eye? 

There may be reason to hope that this promotion will not last long.

On April 21st, Health Canada officials shut down a different street promotion for Vype in Toronto.  On that occasion, a more permanent installation had been staffed by women attendants (in silver suits) for the Easter holiday weekend. According to news reports, the installation and material was seized by government inspectors on the basis that the promotion was "deemed to be in contravention of the prohibition on lifestyle advertising of vaping products and the prohibition on the use of testimonials and endorsements to promote vaping products.”


Why Imperial Tobacco thought it could persist with brand activations (or whether Health Canada has told them they cannot) is not clear.

A late delivery

The free vaping device arrived this morning by Canada Post and after signing and showing proof of age, it is now mine to keep.

In comparison with the warning about the battery on the shipping label, the warning on the box seemed non-alarming. And there were no warnings at all on the device as it is meant to be used -- nor any on the "crisp mint" and "tobacco" flavoured pods.

The Vype brand activation team had told me that the delivery would be made within 2 to 3 business days. In fact it took a week longer. If only that were the extent of the misinformation...

Friday, 15 March 2019

BAT research on vaping suggests that for every 'switcher' there is a new user.

"Accelerating" is the key word in the presentations made by British American Tobacco to its investors yesterday. Not just accelerating the growth in new customers for its modern nicotine products, but also in "accelerating delivery" both of profits and of nicotine to those users.

A quick look at some of the statements they made which might be of interest to Canadian tobacco policy-makers.

New nicotine products (i.e. vaping) have reversed the decline in tobacco use.

In BAT's largest 40 markets (excluding the USA), the number of nicotine users (including both smokers, vapers and people who use oral tobacco) is now higher than it was a decade ago. The epidemic of nicotine addiction is not shrinking - it is growing.

Forecasting suggests vaping products will not reduce the number of smokers

BAT is not predicting that vaping will replace smoking, but that it will add to it. Their 5 year forecast shows a very slight decline in cigarette smokers (even slower than the death rate would suggest), and a steady growth in other product users. (In the chart below, light blue is vaping, yellow is heat not burn and green is modern oral tobacco, discussed below).

Public health officials may be hoping that vaping will replace smoking -- but BAT is assuring its investors that this won't happen.

Vaping is now the main gateway to nicotine use for Canadians.

Over decades, Canadian governments have put laws in place to remove inducements for young people to smoke cigarettes. Television ads, billboards, retail displays and sponsored events promoting cigarettes have been squeezed out of young people's environment. But the same laws are not in place in Canasda (except in Quebec) for vaping products. The result, according to BAT research is that 5 in 10 "entrants" (new users) to the nicotine market in Canada are attracted first to vaping products.

Vaping is not for switchers, its for starters.

The rationale given by Canadian governments (and others) for a lax approach to regulating vaping was that they wanted to encourage smokers to switch to products which were viewed (by government and others) as less harmful. But it turns out that more than half of those who use vaping products are non-smokers - a situation unlike heated tobacco products, where only 1 in 10 users are not already nicotine users.

BAT's primary marketing tools are not embraced by traditional FCTC-style regulation

Big data, direct contact with consumers, digital marketing and retail loyalty programs are the primary arrows in BAT's marketing quiver. By contrast, Canada's recently revised Tobacco and Vaping Products Act is constructed around traditional broadcast marketing (as are other countries). There are few measures yet in place to monitor, let alone regulate, these activities.

These are only a few of a hundred of more slides that cover important topics like poly-use, new products, regulatory impact, menthol bans and more. Food for thought!

Monday, 11 March 2019

JTI-Macdonald's promotional budget is a whopping $100 million per year - 25% of its earnings from cigarette sales.

A week ago, the Quebec Court of Appeal upheld a lower court ruling against the three main tobacco companies operating in Canada. JTI-Macdonald , the smallest of the three companies, created a bit of a commotion when it promptly filed for creditor protection under the Canadian Companies' Creditors Arrangement Act (the bankruptcy law for big companies).

One of the requirements of their application to the court was to disclose financial information, including a forecast of their revenues for the next few weeks.  This material was found as Exhibit DD in in Volume 4 of their application, which can be downloaded from the accountants managing the application. (It begins on page 176).

From this, we now know that the annualized anticipated gross revenue from sales will be about $1 billion, of which $575 million will be turned over to governments in the form of excise taxes and GST/HST. That leaves about $385 million in sales revenue net of consumer taxes for the year.

So far, so good. But it gets even more interesting.

JTI-Macdonald Cash Forecast
13 weeks, Spring 2019
A few lines down is the entry related to "Promotions and Marketing."

Canada is a country which decades ago banned conventional tobacco advertising. Yet JTI-Macdonald anticipates spending about $100 million on "various marketing and promotional initiatives, such as inventory support programs and brand support programs. Initiatives are generally paid 30 days in  arrears or via quarterly installments."

This, folks, is the amount they spend on paybacks to retailers. We have been told by retailers that they receive monthly payments from JTI in return for meeting their sales quota, but this is the first time that the amount has been made public. (Health Canada requires companies to report certain promotional expenditures but this is not among them.)

Elsewhere in the filing (in Volume 2), JTI mentions that it deals with 28,0000 retailers. If all of them get payments, it would add up to an average $3,495 each!  As below the radar bonuses go, that's not too shabby.

Otherwise expressed, for every $1 in revenue that JTI-Macdonald generates from cigarette sales, it spends $0.25 on promotional support. Is this what a ban on tobacco promotion is supposed to look like?

Wednesday, 27 February 2019

Is Health Canada really going to let Imperial Tobacco off the hook for its illegal vaping ads?

Before Bill S-5 was passed, a number of health groups (including our own) warned parliamentarians that this law would pave the way for tobacco companies to return to television advertising. Regretfully, we were right.

Hill Times Ad, May 2017

Between September and November  last year, Imperial Tobacco broadcast ads for its Vype Epen 3 on Canadian television stations. Although TV ads were permitted by the law, in our view this one was not. In October, we filed a complaint with Health Canada, pointing out where the advertisement contravened the sections of the Tobacco and Vaping Products Act which prohibited lifestyle advertising (s. 30.2).

And there it seemed to sit. We received no written response from the department, and it was not clear whether or when they had taken any enforcement action.

As it turns out, Senator Seidman had also been concerned about the advertisement, and on November 28th used her opportunity during the Senate's Question Period to request information on any enforcement actions. The Senate returned from its winter break last week, and the following reply was tabled on February 19:
Health Canada has initiated action. A notice of non-compliance was sent to Imperial Tobacco Canada on November 1, 2018. The notice demands that the company immediately cease the promotion of Vype Epen3 by means of lifestyle advertising on Canadian television and social media platforms.
Health Canada has a rigorous compliance and enforcement program in place to ensure that manufacturers, importers and sellers of vaping products comply with the Tobacco and Vaping Products Act (TVPA). If necessary, Health Canada will take further enforcement measures.
Under the TVPA, only information and brand-preference advertising of vaping products is permitted. The TVPA bans advertising appealing to youth, lifestyle advertising, and sponsorship promotion, and restricts giveaways of vaping products or branded merchandise.
Additional restrictions came into force on November 19, 2018, including prohibitions on the sale and promotion of vaping products with features that are appealing to youth, the marketing of products using flavour names associated with candy, desserts, or soft drinks; and product promotion by testimonials or endorsements.
This answer raises more questions.

  • If the company was asked to "immediately cease the promotion of Vype Epen3 by means of lifestyle advertising", why was the television ad allowed to continue? 
  • Will the department lay charges for the more than 1,000 broadcasts of the ad which were made after November 1?
  • Will they lay those charges quickly?   Section 51 of the Tobacco and Vaping Products Act requires that such charges be laid within 2 years of the offence being committed.  That makes November 18, 2020 the last possible day to lay charges before the guilty parties get off scot-free.
  • Will the television stations which profited from the broadcasts also be charged? 
  • Are there any consequences at all for nicotine multinationals and broadcast giants who contravene health law?
  • Imperial Tobacco was also asked to immediately remove lifestyle ads from "social media platforms." So why are thousands them still there? (See our blog of February 7, 2019).
  • Why do you have to be a Senator to get information in writing on enforcement of the law?

A list with more than 1,000 occasions when the Vype ad was broadcast in Canada after Health Canada informed Imperial Tobacco to "immediately cease" can be downloaded here. (The records were found in the program logs filed by broadcasters with the Canadian Radio-Television and Telecommunications Commission).

Thursday, 7 February 2019

Imperial Tobacco slips through cracks in federal vaping ad restrictions. Provincial governments (especially Quebec) do better.

Health Canada's new law on vaping products (the Tobacco and Vaping Products Act, TVPA) received Royal Assent on May 23, 2018. 

This was the starting gun on a race to dominate the legal vaping market. Some 8 months later, it seems that the federal rules for this race that were set in law are even weaker than expected, and have resulted in pervasive lifestyle ads -- except in Quebec and other provinces that have taken a better approach..

The federal law -- a permissive structure

The structure adopted in the TVPA is one that gives nicotine manufacturers a general permission to advertise, and then identifies styles of ads which are not permitted (i.e. lifestyle ads, ads that appeal to young people, testimonials). This “everything is permitted unless it is expressly forbidden” approach is the opposite of what the same law does with respect to tobacco products, where a a general ban on tobacco advertising exists, with some specific exemptions (i.e. direct mail addressed to adults). (Compare the law at s. 19-22 to s. 30).

The Quebec law - a restrictive approach

Of Canada's 10 provinces,  Quebec has taken the most comprehensive approach to controlling tobacco advertising. Under the Quebec Tobacco Control Act (updated in 2015), electronic cigarettes are considered a tobacco product. Generally speaking the same restrictions apply to both categories of nicotine products. Vaping ads are tightly restricted, and are banned if they are "disseminated otherwise than in printed newspapers and magazines that have an adult readership of not less than 85%". Even then, printed ads may only "provide consumers with factual information about a tobacco product, including information about the price or the intrinsic characteristics of a tobacco product and about brands of tobacco products." They must also include a prescribed warning.

Other provincial restrictions

Some other provinces have also adopted additional restrictions on vaping ads. Nova Scotia's Tobacco Access Regulations  exempts vaping stores from restrictions on displaying products at retail, but curtails their right to advertise other than by "a door decal"). Manitoba's Smoking and Vapour Products Control Act bans the advertising of vapour products "in any place or premises to which children are permitted access". Similar restrictions are in place in Prince Edward Island's Tobacco and Electronic Smoking Device Sales and Access Act. 

Compare and contrast: Television

Imperial Tobacco has shown that it is prepared to play fast and loose with the federal restrictions, but that provincial laws have offered some protection.

Television advertisements for Imperial Tobacco's Vype ePen3 appeared daily in 6 provinces across Canada between September 3 and November 18th. Television ads are (sadly) allowed under federal law, but lifestyle ads are not. Despite the obvious lifestyle elements of the ad,  it was broadcast until November 18th. 

In January, broadcast logs for Canadian television stations were made public. From these, we now know that Imperial Tobacco's Vype ad was not broadcast in the provinces which have more powerful restrictions in place (Quebec, Nova Scotia, Prince Edward Island, Manitoba). 

This ad was the subject of our complaint on October 18. If any enforcement action was taken by Health Canada against Imperial Tobacco or the broadcasters, no information has yet been made public.

Compare and contrast: Publications 

In English-speaking Canada, Imperial Tobacco has focused marketing efforts on electronic publications, including ads on digital media, including newspapers, Instagram, Facebook and YouTube. As shown at the end of this post, these ads evoke excitement (explosions!), recreation (travel), glamour (sexy ladies!) and testimonials.   

It is not clear at this point whether digital advertisers are respecting provincial laws and preventing these ads from being viewed in jurisdictions like Quebec. What is clear is that the ads that are being published in Quebec in conformity with its law are much closer to the intent of a ban on lifestyle advertising. 

VYPE ads governed by Quebec's Tobacco Control Act
(from the Journal de Montréal, Quebec, February 2019).

VYPE ads governed by the federal Tobacco and Vaping Products Act
(from Instagram, Facebook, Sports Net and YouTube, January-February 2019)