Wednesday 29 January 2020

The "heterogeneity" of the vaping market and why it can hinder regulation-making

A key challenge for health regulators when facing emerging nicotine devices is the complexity and change in that market place.

Unlike cigarettes, which researchers and regulators have generally treated as identical products across geography and time, next generation products like e-cigarettes vary greatly in their design, contents  and marketing from place to another and from one month to the next.

These differences can hinder the ability to apply research evidence or regulatory evaluations from one jurisdiction when developing approaches for another.

"A continually changing and heterogenous group of products"

This "heterogeneity" of the e-cigarette market was identified by the U.S. Surgeon General in his recent report on Smoking Cessation as a key reason for not beng able to settle the question of whether e-cigarettes are effective smoking cessation aids.

"E-cigarettes, a continually changing and heterogeneous group of products, are used in a variety of ways. Consequently, it is difficult to make generalizations about efficacy for cessation based on clinical trials involving a particular e-cigarette, and there is presently inadequate evidence to conclude that e-cigarettes, in general, increase smoking cessation."

The influential 2018 report by the National Academies of Science, Engineering and Medicine similarly stressed the "highly variable" "product characteristics" that affected conclusions about the impact of e-cigarettes on health. 

A snapshot of the products marketed by tobacco companies in January 2020

Even products sold by individual companies under the same brand-name can vary greatly from one country to the next.

We gathered information from the country-level web-sites for e-cigarettes that are managed by the four largest multinational tobacco company systems: JUUL (Altria-Philip Morris International), VYPE (British American Tobacco), BLU (Imperial Brands) and LOGIC (Japan Tobacco). This is made relatively easy because each of these companies sell seemingly identical products on nearly-identical web-sites in a dozen or so countries.

Comparing the e-cigarettes that are offered for sale in different countries does not give very good information on what people are actually putting in their lungs, but it does give some insight into the products that companies think they can manufacture within the local regulations and also find a buyer for.

The differences among products may reflect regulatory conditions (i.e. differing maximum nicotine concentrations), but could also reflect differing consumer preferences (i.e. different types of flavours), differences in competitiveness of the marketplace (i.e. higher or lower prices). They could also reflect differences in the companies' market strategies - it is possible that the companies are testing different marketing approaches in different markets.

Without inferring meaning from these different country-level marketing practices, we can nonetheless observe them. During January 2020, data on the price, nicotine level and flavour offerings for each e-cigarette device was obtained and documented for each company web-site that was accessible. The results were tabulated in data sheets, which can be accessed through the links at the bottom of this post.

E-cigarettes are more affordable in Canada than in most other markets

BAT and Japan Tobacco sell their leading e-cigarette devices at lower prices in Canada than they do elsewhere. A starter kit for VYPE e-Pen3 and Logic Compact can be purchased this month for less than $10 in Canada, but the listed or suggested retail price in other countries is higher - twice as much in Europe and three times as much in New Zealand. The difference in affordability, shown by using purchasing power parity, can be even more pronounced.

For JUUL and myBLU, different global pricing practices were noted. In both those cases, the prices in the United States were least expensive, but were otherwise more stable across all markets.



Canadians are not offered the option of lower-nicotine strengths.

Although many countries impose maximum nicotine concentrations (the level in the European Union is 20 mg/ml), none impose minimum nicotine concentrations. Nonetheless, the availability of low nicotine liquids is much higher in some markets than in other. In many of the European countries, there are many flavour options for nicotine-free and lower-nicotine (9 mg/ml) cartridges, but in Canada consumers generally only have the option of 18 mg or above. Similarly, European consumers have more options for non-protonated nicotine (those which do not use salts) than they do for the more easy-to-inhale protonated (salted) versions, which are predominant in Canada, the United States and New Zealand.

JTI, for example, does not offer customers outside of the European Union with an option for its Logic Compact which is less than almost double the European maximum concentration. (34 mg vs 18 mg).





Some markets - and some companies - offer more flavour options than others

The role of flavours in inducing young people to take up vaping (or encourage smokers to switch to vaping) is currently a much discussed aspect of vaping regulation. The question of "how many flavours is enough?" seems to be get different answers in different markets.

In all markets, tobacco, mint and fruit flavours predominate, but the number of flavours offered varies considerably by company and country. JUUL, for example, sells only a handful of flavours in each country. (Ahead of regulatory requirements, it withdrew non-tobacco or menthol flavours from the U.S. market and has suggested it will do so in Canada as well.)

The Vype product, by contrast, is sold with many more flavour options for its cartridge-based systems (ePen 3 and ePod), especially in larger European markets like the United Kingdom and France.


The relationship of flavours to nicotine strength also varies. There are relatively more higher- nicotine level offerings for tobacco-flavoured Logic cartridges in Europe than there are for fruit flavours -- although in Canada, all the flavours are offered in much higher nicotine concentrations.


Small data is not enough. 

Scraping the data from web-sites may provide some insight into differences in the e-device market across countries, but is a cumbersome, limited and inadequate method to provide real anlaysis. It cannot substitute for methods to systematically track the products offered for sale and the use of these products.

Public market data systems have not been developed. To date only the (expensive and licence-restricted) commercial services provided by trade analysts like Euromonitor, Numerator and Nielsen are available to regulators and researchers. The federal Tobacco and Vaping Products Act gives the federal government the right to require companies to provide reports on sales and marketing activities, but these are not yet in place. (Such regulations have been required of tobacco manufacturers for almost 20 years). No government has yet required retailers to use "sales recording modules", such as those required for restaurants and food trucks in Quebec, although this is a method used by Nielsen to gather commercial data.

Public health surveys, like the Canadian Community Health Survey, are designed to monitor cigarette smoking, but do little to enlighten regulators aboaut the impact of the new nicotine market on health.

It is becoming clearer, as the U.S. Surgeon General pointed out last week, that with "heterogeneity" and "continually changing" markets, we will be challenged in finding evidence we can rely on to support regulatory changes. Even the conclusions of major scientific reviews, like those of the National Academic of Science, Engineering and Medicine, can be called into question. That report considered only research published before August 2017: many of those studies would have been based on products on the market in 2016 or earlier.

January 2020 snapshots from vaping e-commerce websites of multinational tobacco interests.

Links to data cited in this post:

* Japan Tobacco Logic Vaping Devices - January 2020
* British American Tobacco Vype Vaping Devices - January 2020
* JUUL Vaping Devices - January 2020
* Imperial Brands Blu Vaping Devices - January 2020  

Wednesday 22 January 2020

Weedless Wednesday 2020: The future of tobacco in Canada is on the table. Literally.

For more than 40 years, Canadian smokers have been encouraged to see "Weedless Wednesday" as an opportunity to make a quit attempt, as Canadian health systems use the week around it (National Non Smoking Week) to focus efforts on helping communities abandon tobacco use.

While in former decades this was a week of multiple announcements and media attention, more recently it has been observed without much policy or public attention, or even none at all.

On this Weedless Wednesday, Canadians are faced with two momentous tobacco control issues that merit public review. One of these - the youth vaping crisis - is on display in schoolyards, parents' basements, and hockey team locker rooms. The other - the resolution of government lawsuits against tobacco companies - is hidden behind the closed doors of Bay Street law firms.

Putting the future of tobacco in Canada on the table.

Ten months ago, the three large companies that dominate the Canadian tobacco market filed for insolvency protection, using their rights under the federal Companies' Creditors Arrangement Act (CCAA). These are highly profitable companies which are wholly-owned subsidiaries of other highly profitable companies. Their annual earnings in Canada are around $2 billion. In short, these are the last companies you might expect to see claiming court protection from their creditors.

It was a unanimous, detailed, forceful articulation of the companies' long-standing wrongdoing by the Quebec Court of Appeal last March that apparently triggered the companies to abandon their attempts to defend themselves in court against the lawsuits against them. The Quebec Courts had found them responsible to pay $13 billion in damages to 100,000 Quebecers whose serious lung illnesses could be traced to the companies' illegal behaviour, especially their failure to warn, their misleading advertising and their deceptive public relations strategies. These same corporate actions were the basis of the billions of dollars (reportedly over $500 billion) in compensation the provincial governments were seeking as repayment for treating the diseases caused by the companies' bad behaviour.

The courts granted the companies' request for protection under the CCAA, suspended all of the lawsuits they were facing, and appointed a retired judge (Warren Winkler) to try to negotiate a settlement between the companies and all of those who might have claims against them. These claimants include the Quebec class action suits (the only lawsuits to go to trial), all 10 provinces, aggrieved farmers -- as well as any other Canadian who has a claim. At the request of the companies, the process has been blanketed in secrecy.

The outcome of these negotiations - once approved by the court -- is expected to provide a "global settlement" to all claims against the companies. It will draw a line under past wrongdoings and allow the companies to face the future without the legal baggage of their past.

Who gets to set the future course?

How to resolve the tobacco lawsuits is one of the most important public policy issues of this decade. Yet governments are not applying the standards of transparency and public consultation that are expected and routinely applied to much less significant issues. Not one of the provincial governments has yet consulted on how these cases should be resolved, and all of them have agreed to the secretive process initiated by the industry.

A problem that money can't solve

The provincial damage claims vastly exceed the capacity of the companies to pay. The $300 billion claim of Ontario, for example, is equivalent to 150 years’ combined annual profit of the companies in Canada, or more than a decade of global profits from their multinational owners. (An exception to this are the claims of Quebec smokers, which the Qeubec court set at an amount so equivalent to the profits of the companies so that injured smokers, and not shareholders, would receive the short-term profits of tobacco sales in Canada. ) 

When it comes to the big provincial claims, there is no money in the tobacco company bank. Anticipating lawsuits for decades, tobacco companies have studiously kept their cupboards bare. Instead of banking their profits, they routinely pass them on as dividends to shareholders who are sheltered by corporate law from any liability or claim. 

In other words, any financial compensation will be the result of future tobacco sales. In order to repay Canadian governments and smokers for past wrongdoing, tobacco companies will have to sell cigarettes to future smokers (or smokers in other countries). Not only will this cause more disease and suffering, it will also drive up future health care costs. 

It is hard to see such a scenario as anything but a kind of litigation Ponzi scheme, where harm is passed down the chain in order to make good to initial victims. 

A problem with a meaningful solution

Governments can instead leverage the companies' debt to them by imposing requirements that they wind down their Canadian business and agree to an orderly withdrawal (phase-out) of tobacco products. Like asbestos and leaded gasoline, cigarettes are a consumer product that should be relegated to history.

Rather than money, the main goals of provincial lawsuits against tobacco companies should be:
1. Significant and permanent changes to the foundation of the companies and their business practices.
2. A mandatory and enforceable timetable for the rapid phase-out of combustible cigarettes, followed by a phase-out of non-licensed nicotine products

Last week, the man who led the first provincial lawsuit agreed. Former B.C. attorney general (and later federal Minister of Health) Ujjal Dosanjh told the TyeeI believe tobacco is not something that is healthy at all and if we can put it out of business we should ... I believe we should be leading the international effort to actually have it made illegal, have it banned across the world. What’s happening is that they were victimizing us and they still continue to victimize the poorer countries."

The Tyee reports that mediation talks are taking place "this month" - perhaps even this week. These discussions will set the stage for tobacco control efforts for decades. 

The insolvency orders which protect the companies will expire on March 12th 2020. On that date, a hearing will be held in Toronto regarding the future of the CCAA process. On that day it may become clear whether governments are using their negotiating power to keep people smoking for the following decades, or whether they are aiming to protect further generations from addiction, illness and death.

You can follow developments on the tobacco trials at: tobaccotrial.blogspot.ca

Monday 20 January 2020

Smokers tell Health Canada they like information on specific benefits of quitting, but have concerns about being encouraged to switch to vaping.

More public opinion research results have recently appeared on the Library of Canada web-site. Among them are the results of two series of focus groups conducted as part of the overhaul of health warning messages (HWM) that are printed on the outside of tobacco product packages and Health Information Messages (HIM) that are printed on the inside.

This post reports on report Number POR-025-19  Qualitative Testing of New Health Information Messages, Including Placement Options, as well as the Thematic Linking of Labelling Elements – 2019

15 in-person focus group tests were conducted with 132 regular smokers spread over Toronto, Wiknnipeg, Edmonton, St. John's and Quebec City. Five focus groups each were held with youth (ages 15-19), young adults (ages 20-24) and adults (aged 25+). The sessions were held mid-summer (July 13 and 27).

Time to move the messages?

The researchers found that the current HIM's, which are printed on the back of slide and shell packages or are included as inserts in flip-top packs, are not getting noticed. "Very few participants said they pay attention to the HIMs when they purchase a new package of cigarettes."

In reponse to this concern, Health Canada has proposed alternative locations for the messages. All of these are based on moving to a standardized slide-and-shell package format, as will be required next year when the plain and standardized package regulations come fully into force.

Of the formats tested, the most noticeable (and "annoying") of these was an extension of the top flap that went over the top of the cigarettes. Other options included a sticker covering the foil of the cigarettes and an extension of the interior tab. Illustrations of these three formats are shown at the end of this post, as are the messages tested.

Time to change the messages?


Eight new health information messages were tested. Two presented specific benefits of stopping smoking (lowering the risk of diabetes and improving skin health). Three were new presentations of quit tips and suggestions.Three encouraged smokers to think about switching completely to vaping products.

Each smoker was asked to rank the messages in terms of how effective they were at providing information about the benefits of quitting and how effective at making them think about quitting.

Generally speaking, the researchers found "participants were more likely to react positively to concepts that conveyed a meaningful benefit of quitting over ones that focused mostly or entirely on tips to help them quit."

The proposed messages to encourage smokers to switch completely to vaping, however, were firmly rejected by the smokers. As the researchers describe it:

"Reactions to HIMs on Vaping

Three HIMs suggested that switching completely to vaping can reduce exposure to harmful chemicals in cigarette smoke and could be a potential method to quit smoking cigarettes. A good number of participants could relate to using vaping as a strategy to quit smoking cigarettes entirely. However, many felt that these HIMs either did not have enough information about vaping or that they have heard too many bad things about vaping (e.g. the chemicals it contains, exploding devices, popcorn or bubble lung, etc.) for it to be considered a viable alternative to smoking cigarettes. While most could appreciate that vaping may be different from smoking cigarettes, most also felt it was like replacing one addiction or “evil” for another. In the end, most would agree that the “jury is still out” and that the long-term effects of vaping have yet to be understood.

As such, very few felt comfortable with the idea of replacing cigarette smoking with vaping and most were also quite uncomfortable, even upset, with what they perceived as Health Canada recommending, endorsing, or promoting vaping. In the end, only a few felt that it was a strategy worth suggesting, especially coming from Health Canada.
...

One of the biggest reactions came from the discussion around vaping. Three HIMs (#17, #24 and #25) suggested that switching completely to vaping can reduce exposure to harmful chemicals in cigarette smoke and could be a potential method to quit smoking cigarettes. Vaping elicited mixed reactions when participants read these parts of the HIMs. While a good number of participants could relate to using vaping as a strategy to quit smoking cigarettes, most were reluctant to accept the idea of positioning vaping as an alternative to smoking in the HIMs. This reluctance was in large part driven by concerns that the long-term health effects of vaping are unknown. Many also mentioned that they had come across too many conflicting reports about the benefits and harmful effects of the product. Many felt they did not have enough information about vaping and that they have heard too many bad things about vaping (e.g. the chemicals it contains, exploding devices, popcorn or bubble lung, etc.) for it to be considered a viable alternative to smoking cigarettes. As far as participants could tell, they felt that switching from smoking cigarettes to vaping was switching from one addiction or bad habit to another.

Participants were especially concerned about seeing vaping messages on HIMs put out by Health Canada. They felt that Health Canada was "endorsing" or "promoting" vaping and this left them feeling uneasy and, in some cases, upset. For many, this left them questioning the credibility of Health Canada. For a few participants having seen other Health Canada messaging describing the ill effects of vaping, seeing these HIMs left them wondering if Health Canada was "talking out of both sides of its mouth."

Conversely, not all reactions about vaping were negative. There were a few participants in each city who didn't mind seeing vaping as an alternative to smoking in the HIMs. Some participants felt it was good to see Health Canada suggest an alternative to smoking cigarettes directly in a HIM, rather than just recommending to quit cold turkey. A few participants had done a lot of research about vaping and agreed with the HIMs that vaping would be better than smoking cigarettes. A few also emphasized that vaping was much more affordable than smoking cigarettes, and that as a benefit to quitting smoking cigarettes, the financial angle could be discussed in the HIMs in addition to the health-related ones.

In general, participants wanted to see more public education about vaping before they would consider switching to vaping. They wanted specific statistics rather than general statements.

Some common questions were:
* How is it better than cigarettes?
* What are the chemicals in vape liquids?
* What are the long-term effects of vaping?
* What is the success rate among those switching completely from smoking cigarettes to vaping?



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Thursday 16 January 2020

Physicians for a Smoke-Free Canada pays tribute to Rob Cunningham

From the remarks of Dr. David Esdaile, vice-president of Physicians for a Smoke-Free Canada at an gathering of tobacco-control researchers, regulators and advocates at event in Ottawa on January 16, 2020.

"Next week is National Non Smoking Week, an appropriate time to acknowledge with gratitude the leadership of those who have and who continue to push forward for better ways to manage the tobacco problem. I would like to take a minute to honour a couple of local Canadian tobacco control heroes.

One of those great Canadian leaders in tobacco control is and was Dr. Norman C. Delarue. He is remembered and honoured for his research on tobacco use, his tireless efforts to convince health charities, medical organizations, church groups and politicians to work together, his promotion of new regulatory measures that should be put in place, and his lifelong commitment tobacco control.

Dr. Delarue was the Canadian thoracic surgeon who completed the first statistically valid research project that linked cigarettes with lung cancer in 1947. In the 1960s and 1970s it was Dr. Delarue who was at the forefront pushing and pulling Canadians and their governments into responding to this newly-understood health crisis with effective and essential policies and programs.

To honour Dr. Delarue, Physicians for a Smoke-Free Canada occasionally presents an award in his name to other Canadians to whom we are similarly indebted. Tonight, we would like to make this very long-overdue recognition to Rob Cunningham, of the Canadian Cancer Society.

For a quarter century now, Rob Cunningham has been at the forefront of tobacco control efforts in Canada and beyond. He has been a prolific generator of ideas, a steady presence before legislative committees and the media, a voice for reform, an advocate in court, a one-stop-shopping resource for information and advice to local, provincial and federal community groups and governments, a writer, a compiler of evidence, an historian, an institutional memory, a daily news agent. He is the go-to-guy to whom we all go.

It gives me great pleasure, on behalf of the board of Physicians for a Smoke-Free Canada, to present the Dr. Norman C. Delarue award to Rob Cunningham. We thank him for all he has done and continues to do to reduce the toll from tobacco use."

Friday 10 January 2020

This week Israel became the first country to implement plain packaging of e-cigarettes.

On January the 8th, several elements of Israel's law prohibiting advertising of tobacco and smoking products came into effect. Among these were requirements that tobacco products and smoking products (including e-cigarettes,  heat not burn products like IQOS, and non-tobacco products designed for smoking like shisha) be sold in generic packages.

In addition to plain packaging, the new law requires larger health warnings on cigarettes (65%) and on smoking products (30%). In September 2018, shortly after JUUL entered the market, Israel prohibited nicotine concentrations above 20 mg / ml.


The picture above, showing a before and after package of JUUL cartridge mix in Israel, is provided with the kind permission of Smoke-Free Israel.

Israel is the first country to require generic packaging of e-cigarettes, although other jurisdictions are proposing to follow suit.
E-cigarettes and liquids sold in Canada are subject to restrictions in the federal Tobacco and Vaping Products Act. As of this summer, this will require warnings and labelling that conform with the new Vaping Products labelling and Packaging Regulations, which were Gazetted on Christmas day. These include a warning that covers 35% of the principal display area.

The federal law imposes other restrictions on e-cigarette packages. It prohibits designs that suggest that the vaping liquids have banned flavours (i.e. candy or desert), as well as illustrations that "cause a person to believe that the product is flavoured if there are reasonable grounds to believe that the indication or illustration could be appealing to young persons."   

Despite these restrictions, major companies are packaging their vaping liquids in colourful packages with evocative imagery.

Monday 6 January 2020

Another new year, another round of tobacco manufacturers' price increases.

This week Canadian tobacco companies raised the price they charge to retailers for cigarettes and other toabcco products. This month the price (per cigarette) went up by 1 to 1.5 cents in in most parts of Canada ($2.50 to $3.60 per carton), as shown in the memo sent by Imperial Tobacco to retailers on December 2nd.

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From a public health standpoint, increases in tobacco prices are generally viewed as a good thing. There is a long and robust evidence base that higher cigarette prices lead to lower rates of smoking and lower levels of consumption by those who do smoke.

Price increases by tobacco companies, however, are often implemented in ways which defeat this health objective.

That's because tobacco companies want to raise prices without causing smokers to quit or reduce the number of cigaretes they buy. For them, prices are an optimizing exercise in increasing revenues on each sale while maintaining a large customer base. To address this challenge, the companies have adopted a number of pricing practices and marketing tactics.

This week's price increase is a good moment to review 5 pricing tactics they use in Canada.

Pricing tactic # 1: Blunt the impact of price increases by spreading them out 

A 60 cent a package increase is much more noticeable to smokers than two 30 cent increases -- which is why the companies favour multiple small increases rather than a few large ones.

For example, this week's wholesale price increase is at least the second set of increases over the year. Manufacturers' prices were also increased by 1 cent per cigarette ($2 per carton) in May, bringing the annual total increase by manufacturers to at least $4 to $6.00 per carton. There may have been additional increases this year, but the ones cited here were the only ones shared with us by retailers. There is no public registry of tobacco wholesale prices in Canada, as there is in Iceland.

Pricing tactic #2: Disguise price increases behind tax increases

Tobacco companies have a long tradition of timing their own price increases to match any rise in taxes. This week an example of that is shown in the higher price increases that are taking place in British Columbia when compared with the other provinces.

British Columbia is the only province to have timed a tobacco tax increase to the New Year. A $4 per carton increase was included as part of the measures announced by the government in November to discourage youth vaping and tobacco use. (B.C. now has the second highest rate of cigarette tax  in Canada.)

Although the B.C. tax increase represents only $0.40 per package of Players cigarettes, for example, the actual increase for smokers will be $0.83. Imperial Tobacco increased the price of that brand by $0.35 per pack across the country and added an additional $0.08 in British Columbia. Upset smokers will blame the government for the increase, not the manufacturers.

Cigarette tax rates in Canada, January 1, 2020


Pricing tactic #3: Price segment your brands so that there are cheaper brands available to price-sensitive smokers 

For over a decade, tobacco companies have used price-segmentation to divide their brands into higher priced premium brands, mid-range value brands and lower cost budget or super-value brands. Each of these categories had about one-third of the market in 2015, as Japan Tobacco informed Health Canada. 


In a market where all cigarette brands are sold at the same price (as was the case in Canada before 2003), a smoker facing a price increase had the options to quit, to cut down or to pay the price increase. With price-segmentation of brands, a fourth option was introduced - the smoker could also choose to switch to a lower priced brand.

In Canada there are no minimum price laws or other legal restrictions on tobacco companies selling brands as lost-leaders or below the cost of production.

Pricing tactice #4: Localize prices to give price-sensitive smokers the option of cheaper retail outlets.  

Just over a decade ago, it was illegal for manufacturers to charge different prices to different retailers for the same product. That changed in 2009 when the federal Competition Act was amended, Soon after tobacco companies began charging different prices to different retailers, a practice that was made easier because they replaced traditional wholesale distribution with their own 'direct distribution' contracts with retailers.

The conditions imposed on retailers when they purchase cigarettes ensure that the retail price set by the manufacturer is charged by retailers. Retailers who wish to benefit from lower wholesale prices are obliged to restrict their profit (markup) to a lower percentage.

The result is that the same brands of cigarettes are sold at lower prices in some neighbourhoods than in others.  An example from our price survey in Montreal in early November 2019 shows how large these differences can be: the price of the same budget cigarette brands  (Pall Mall, Philip Morris) was $7.62 per pack in one store and $9.00 and $9.25 per pack only a couple of kilometres away. Even stores in the same chain (eg Couche Tard / Circle K) were charging different prices for the same cigarette brands at different locations.

This pricing practice has allowed the companies to introduce another option for smokers facing a tax or price increase -- to switch to purchasing their cigarettes at a cheaper retailer.

Pricing tactic #5:  Discourage tax increases. 

Most of the price paid by smokers for a package of cigarettes results from the federal and provincial excise taxes that are imposed on them. The World Health Organization recommends that taxes represent at least 70% of the price. Health Canada reports that taxes represent about 64% of the cost of a package of "the most popular price category" of cigarettes: because taxes are mostly at a fixed rate per cigarette this percentage varies by province, brand and retailer.

Tobacco companies want governments to keep taxes lo because a) lower prices will not encourage smokers to quit (and may encourage more young people to start smoking) and b) when taxes are low the companies have more "pricing room" in which they can escalate their profit margins.

Recent reports written on behalf of British American Tobacco and presented to governments in Ontario and Quebec encourage government to abandon excise taxes in favour of alternative tax models or to ensure that any increase is gradual, predictable and small.

And yet their own price increases are equivalent or greater than the tax that they claim will drive smokers to the illegal market. The Quebec government has not increased tobacco taxes since 2014; the Ontario government last raised tobacco taxes in March 2018.

While taxes have stayed steady in the largest provinces, industry prices have climbed significantly. Reports filed with Health Canada show that the average manufacturers' revenue per cigarette increased by more than 25% between 2017 and the first half of 2019. This is equivalent to $7.40 per carton.
Data provided by Health Canada, November 2019.
Data for 2019 is for half year only

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Spotlight on:  

Cigarette pricing in Montreal


Our survey of posted prices in central Montreal in November illustrates the use of price segmentation and price localization. Montreal smokers who are concerned about price increases are offered the opportunity to switch to lower cost brands and to switch to cheaper retail outlets.

The same survey was conducted in 2018 and 2017. Results from those years shows that the companies have also been successful in grabbing pricing room for themselves and successfully blocking tobacco tax increases.

The companies raised their prices on their cheapest cigarettes by an average of by 33% in only 2 years (from 12 cents to 16 cents per cigarette, or $8 per carton.) By contrast, during the same period, the Quebec government did not increase taxes and the federal government increased them by 1.5 cents per cigarette.

Wednesday 1 January 2020

Yet more federal government opinion research on vaping

Last spring the federal Privy Council Office (the department which serves the Prime Minister and Cabinet) commissioned a series of focus groups across Canada to gain information on a number of topical issues. The topics ranged greatly, with Canadians being asked for their input on possible names for national pharmacare and climate plans, to their views on steel tariffs and pipelines.

Although the focus groups were held in April, May and June, the results were only recently released. They were prepared by Phoenix Strategic Perspectives under the title "Spring 2019 Focus Groups" POR 139-18 and are available in three separate reports on the National Library 

One topic put to the last cycle of focus groups in June related to vaping products and smoking. The conclusions from this report are reproduced below.

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6. Vaping and Smoking


Issues in this section were explored with participants in Surrey, Fredericton, Sorel, and Belleville.

Smoking and vaping status

Most groups included a mix of smokers (daily and/or occasional smokers) and non-smokers. The exceptions were the group of women in Fredericton and homeowners in Surrey, all of whom were non-smokers. Among those who are non-smokers, many are former smokers. At least a few participants in most groups said they have tried vaping.


Experience and familiarity with vaping

Those who have tried vaping said they did so either out of curiosity, typically in a social setting (e.g. with friends), in order to try to quit smoking, or in order to try to reduce stress. A few added that they believe vaping is expensive and/or more expensive than smoking cigarettes. Those who have not tried vaping identified the following as things they feel they know or have heard about it:
  • it is very popular among youth (i.e. trendy)/considered ‘cool’;
  • there is a lack of knowledge about its long-term health effects;
  • the vaping liquids come in a variety of flavours;
  • one can vape with or without nicotine;
  • smokers use it as a way to quit smoking;
  • one can strengthen or weaken the intensity or dose of what is inhaled;
  • it is not regulated/not as regulated as cigarettes;
  • it has been linked to the condition known commonly as ‘popcorn lung’ (bronchiolitis obliterans);
  • some vaping devices have exploded;
  • big tobacco companies are involved in it;
  • it looks silly;
  • it is a gateway towards smoking;
  • it is addictive; and
  • it smells good.

Sources of information about vaping

Participants have learned about vaping from various sources which include the following:
  • relatives/friends and acquaintances;
  • social media;
  • internet;
  • news;
  • seeing people vaping;
  • vape shops (identified by some as increasing in number in their neighbourhoods); and
  • advertising.


Perceived benefits and harms of vaping

Perceived benefits or potential benefits of vaping included the following:
  • it can/might help people quit smoking;
  • it may prevent young people from starting to smoke (i.e. an alternative to smoking);
  • it is not as bad for one’s health as smoking/contains fewer chemicals than cigarettes;
  • it does not smell bad/make one’s clothes smell bad;
  • it does not create second-hand smoke; and
  • the proliferation of vape shops creates employment.

Some said they could think of no benefits to vaping, while some others said they did not know or did not know enough about vaping to offer an opinion.

The most commonly identified harm or potential harm associated with vaping was lack of knowledge/studies about its possible long-term health effects. Other harms associated with vaping included the impression that it was a gateway/pathway to smoking for youth, the danger posed by exploding devices, and the possibility of becoming addicted to it.

Participants tended to express uncertainty when asked about the health effects of vaping, and specifically the harmfulness of vaping compared to smoking tobacco cigarettes. This uncertainty was based on the previously mentioned widespread impression that there is a lack of knowledge/studies about the long-term health effects of vaping. Having said that, the uncertainty in question was often related to how harmful vaping is, not to whether vaping is harmful at all. Indeed, there was a relatively widespread impression that vaping is probably not good for one’s health, even though it is as yet unclear what the health impacts are, and even though it might not be as bad as smoking.

Participants made the following points in this regard:
  • vaping liquids contain chemicals, and inhaling these chemicals into one’s lungs cannot be good for one’s health;
  • inhaling any kind of smoke (whether produced by cigarettes or vaping devices) is not good for one’s health;
  • vaping with nicotine is no better than smoking a cigarette; and
  • vaping may not be as harmful as smoking, but this could result in people vaping more frequently because they think it is not harmful to them, and this increased frequency of vaping could result in negative health effects or addiction.
Some participants were more categorical, suggesting that vaping is harmful (pointing to reports that vaping can cause conditions such as popcorn lung and water on the lungs) and/or dangerous (pointing to reports of malfunctioning of devices resulting in explosions).

Finally, some participants did suggest that in their opinion vaping is less harmful than smoking, but it was also observed that this does not mean that vaping is not harmful simply because it is less harmful than smoking.


Perceptions of smoking

Most participants in these locations interact with people who smoke. This includes friends, relatives, and colleagues, and the frequency of interaction ranges from rarely, to occasionally, to frequently (e.g. daily). Asked how they feel when people in their social circle smoke in their presence, most said they do not like it, with some going so far as to say they hate it. Other feelings elicited by people in their social circle smoking in their presence included disappointment, and a ‘live and let live’ attitude.

Reasons for critical or negative reactions to people smoking in their presence included the following: the smell of cigarettes, the odor it leaves in their clothes/feeling dirty, not wanting to be exposed to second-hand smoke/health concerns, difficulty breathing, allergies being triggered, the temptation to smoke themselves, not wanting their children exposed to smoking/smokers, and difficulty understanding how people can continue smoking given the dangers it poses to health. Participants who expressed a ‘live and let live’ attitude towards those smoking in their presence sometimes added that people in their circle who smoke do so outdoors (i.e. not in proximity to them in an enclosed space).


Perceptions of smoking as a health issue today

There was near unanimity among participants that smoking is a big health issue today. Reasons for this opinion included the following:
  • the effects of smoking have not changed, and illnesses caused by/linked to smoking remain with us (e.g. cancer, emphysema). Related to this was the impression that many smokers and even former smokers are only now beginning to experience the health effects of years of smoking;
  • dangers posed by smoking affect not only smokers but non-smokers (i.e. second-hand smoke);
  • health care costs associated with smoking-related illnesses/the strain it poses on health care resources;
  • smoking is an addiction and should be treated as an illness not just a “bad habit”;
  • the impact it has on the more vulnerable members of society (i.e. lower income Canadians are more likely to smoke but least likely to be able to afford the smoking cessation devices that might work);
  • youth/young people continue to smoke despite health warnings and scientific evidence of its impact on heath;
  • the environmental impact of smoking (e.g. cigarette butts and chemicals that remain in smoked cigarettes); and
  • smoking/having smoked can adversely affect one’s insurance/insurance premiums.
Some participants added that smoking is an important issue to them personally, mainly because of personal health issues/concerns (e.g. asthma, allergies, effects of second-hand smoke) and/or because of the impact it has on relatives/loved ones (e.g. cancer).

While there was near unanimity that smoking is a big health issue today, there were differences of opinion about whether the health risks to Canadians generally that is posed by tobacco has increased, decreased or remained about the same over the past five years. Participants tended to be divided between those who think the risk has decreased and those who think it is about the same.

Reasons for the impression that the health risk has decreased tended to be variations on the assumption that the proportion of smokers has been decreasing over time. This decrease was ascribed to various factors which included the following:
  • the increased cost of cigarettes;
  • greater awareness of the heath effects of smoking, especially among the young;
  • smoking is no longer socially acceptable and no longer seen as ‘cool’;
  • more and more people are quitting smoking as a result of successful cessation devices; and
  • more and more people are turning from smoking to vaping.
Participants who think the risk posed by smoking is about the same as it was 5 years ago provided the following reasons to explain their point of view:
  • they have not noticed any changes over the past 5 years in either health warnings or legislation related to cigarettes (which they noted have been in place for decades);
  • youth/young people continue to smoke despite health warnings and scientific evidence of its impact on heath;
  • people can still be seen smoking in public places (e.g. on work breaks); and
  • the risks posed by tobacco are similar for vaping, which is on the rise and appears to be supported by investment from the tobacco industry.
A few participants think the think the health risk posed by smoking may have increased compared to five years ago. Two reasons were given to explain why. One was the impression that the effects of smoking on health can take years to manifest themselves, the result being that more people may now be suffering from the effects of smoking than was the case five years ago. The other was the impression that e-cigarettes (viewed as a form of smoking) that contain nicotine can deliver higher concentrations of nicotine than regular cigarettes.

Impressions of smoking regulations and social acceptability of smoking

Participants were asked for their impressions of the opinion that smoking regulations have gone too far, and that those who smoke have no rights at all. The widespread impression among participants was that this was not the case. That being said, there was also a widespread impression that smoking is not (or no longer) socially acceptable. Reasons for this impression included the social censure that smokers often encounter (e.g. negative perceptions in general, ‘dirty looks’, critical comments), legislation limiting where smokers can smoke, and the impression that because smoking is harmful, non-smokers have a right to be protected from its effects. Participants who think it is socially acceptable to smoke, primarily men in Sorel, were of the opinion that there is a ‘live and let live’ attitude that still prevails when it comes to smoking and that smokers and non-smokers have reached a modus vivendi.

Impressions of smokers

Most participants said they have a ‘live and let live’ attitude when it comes to smokers, some adding that people have a right to take decisions regarding their own lives as long as it does not interfere with the rights of others. In some instances, participants said their feelings towards smokers vary by age. Specifically, some said they feel disappointment when they see younger people smoking or think that it is stupid for young people to start smoking given all that is known about the health effects of smoking. A few participants said they feel bad for smokers because smokers are often among the more vulnerable members of society (e.g. lower income, less formal education). Participants said their impressions about smokers have not changed considerably in the last 5-10 years. One participant said his impression of smokers changed over this period of time, specifying that after graduating from high school he no longer considered smoking ‘cool’.

Reaction to the statement that that those who smoke could quit if they really wanted to elicited nuanced reactions. There was a widespread impression that people have to really want to quit smoking in order to be successful. In other words, the decision to quit has to be a personal decision and the person in question has to be motivated. At the same time there was also widespread recognition that quitting is not as easy as simply taking the decision to do so, and that various factors come into play. For example, it was observed that smoking is an addiction, that many people need help to break the addiction (e.g. moral support, cessation resources), and that it may take numerous quit attempts before someone is successful.


Perceptions of smoking as a government priority

Most participants overestimated the percentage of the Canadian population aged 15 and older that smokes today (either daily or occasionally). [8] Participants were then read the following statement and asked for their reaction:

Some people say that smoking rates in Canada are decreasing and public focus should now be on other issues such as other health care issues, climate change or balancing the budget. Others say that there are still 4.6 million smokers in Canada and so tobacco should continue to be a high priority. From your own point of view, should tobacco continue to be a high government priority?

Participants were divided in their opinions, though most felt that the public focus should now be on other issues. Reasons given included the following:
  • enough has been done in this regard/efforts have been successful, and much has been achieved (e.g. smoking rates are declining, 15 percent of the population smoking is a good result/acceptable proportion, smoking will never be eliminated completely as long as it is legal);
  • public awareness of the hazards of smoking is now widespread and generally accepted; and
  • other important issues need to be addressed (e.g. opioids, the environment).
Those who think tobacco should continue to be a high priority observed the following:
  • young people continue to start smoking, despite all the information and evidence about the hazards of smoking;
  • smoking has important environmental consequences that should be addressed;
  • the health-related consequences of smoking will still be with us for years (e.g. cancer rates among smokers); and
  • a 15 percent smoking rate can realistically be reduced further (i.e. more progress can still be made).

Ways to help Canadians quit using tobacco products

Participants were informed that Canada’s Tobacco Strategy has committed to reducing tobacco use to 5 percent by 2035 and asked how the Government of Canada/Health Canada could best help Canadians quit using tobacco products, to meet this objective. The most frequently made suggestion in this regard was to subsidize/reduce the cost of smoking cessation resources/strategies (e.g. prescription medications). Other suggestions included the following:
  • raise the price of cigarettes;
  • prohibit smoking altogether;
  • focus on rewarding quitters (e.g. competitions with prizes);
  • focus information campaigns on positive sides of quitting/success stories (i.e. as opposed to scare tactics);
  • focus efforts on young/youth smokers;
  • promote non-smoking among new immigrant/new Canadian communities; and
  • restrict the sale of cigarettes to specialty shops.

Some participants in Belleville suggested addressing laws that facilitate access to cigarettes in certain circumstances, such as the selling of cigarettes on reserves.