Thursday, 4 July 2019

Cheaper. Higher nicotine. BAT's strategy for the Canadian vaping market.

A poster on the door of a convenience store caught my eye last week. On the corner of Parkdale and Scott Street in Ottawa BAT's Vype ePod starter kit was being promoted at $10.99. In this neighbourhood, it is now cheaper to to buy nicotine than lunch.

BAT has made big cuts to the price of its VYPE products in Canada. When the ePod was first available in Ottawa in January, the price was over $40, The ePen 3, introduced late last summer, was priced at a more modest $25.

But the price cuts are deeper in some stores than in others. This Quickie store might sell the ePod for $10.99, but in most other outlets and on the official on-line distributor, the price is consistently set at $19.99.

Neighbourhood-level price controls

Deep discounting at this one store is no random event, nor is it a retail promotion beyond the control of BAT. To the contrary, the imagery, warning and other design elements of the price sign make clear that this was executed by the Vype marketing team. This is an official sign using licensed design.

Nor should it be a surprise. BAT/Imperial Tobacco Canada has pioneered localized wholesale pricing for cigarette products. Since the federal government made doing so legal in 2009, this company has charged different wholesale prices to different retailers, using contracts and incentives to control the amount of mark-up a retailer can add.

Sell global. Price local.

By comparing the price charged for Vype products on BAT's global on-line e-store ( and on its U.S. equivalent (, a similarly dramatic difference in list price can be seen between countries. Prices are available for the ePen in 10 countries and for the ePod/Alto in 5. As shown below, the 'starter kits' for both products are cheaper in Canada than in most or all other countries. The same product is 50% more in France and the United Kingdom, and more than twice as expensive in Germany and the United States.

Nicotine concentration
ePen 3
ePen 3
18, 57
0, 6, 18
6, 12,18
New Zealand
United Kingdom
United States (Sold as ALTO)
Not available

1.5%, 3%, 4.8%
 (Prices were converted to Canadian dollar equivalents at the exchange rate in effect on July 1).

The dose is the problem

Comparing the information on BAT's e-store reveals other differences that pose risks to Canadian youth. The vaping solutions sold by BAT for these products have much higher levels of nicotine in Canada than in all other countries other than the United States.

In the European Union, there is a regulatory limit of 20 mg/ml, but in other markets the nicotine level is set at BAT's discretion. A similar increase of nicotine levels in American markets has been linked to a nicotine arms race against JUUL.

One more tool available to protect youth from nicotine addiction

Although the use of tax to discourage young people from experimenting with tobacco products has long been established as a core public health strategy, there has been little discussion - so far - about using taxes to prevent ultra-low pricing on vaping products (or to prevent companies from giving them away

Health Canada has acknowledged that youth vaping is a problem and recently consulted with the public on regulatory options to address the problem (Reducing Youth Access and Appeal of Vaping Products: Potential Regulatory Measures). The consultation paper identifies that price is a main factor in the purchase decision of youth, but makes no recommendations for any public health interventions to address the impact of affordability on youth initiation.

Maybe it's time to give this additional tool more thought.

And with this particular price sign only a stone's throw from Health Canada's tobacco control office, perhaps this might happen!