Wednesday 20 July 2022

Canada's great cigarette recall

For the third time this year, Health Canada has required British American Tobacco to recall some of the cigarette brands it sells in Canada through its subsidiary Imperial Tobacco Canada. On May 19th, June 6th and July 18th,  the department advised consumers that the cigarette brands in question "do not meet the performance standards required by the Cigarette Ignition Propensity (Consumer Products) Regulations under the Canada Consumer Product Safety Act" and therefore pose an increased fire hazard.

Consumers were given advice on how to protect themselves from this manufacturing defect: "Consumers should immediately stop using the recalled products and contact the distributor, Imperial Tobacco Canada Limited, to return the product for a replacement product."

This post provides some background on the fire-safety regulations that led to this recall.

The problem: Cigarette-caused fires are the leading cause of residential fire deaths

For more than a century, smoking materials have been a major cause of home fires. Although the deaths and injuries caused in this way are much less than the impact on deaths from disease, they are large enough to be identified as a major concern for fire officials 

Statistics Canada recently reported that about 200 Canadians die each year in residential fires. The leading identified cause of those residential fires is smoking materials (cigarettes): one fifth of all residential fire deaths, and two-fifths of those where the cause is known.

These fires are thought to typically start when a smoker falls asleep or otherwise leaves a cigarette unattended and in contact with flammable material. Because many smokers are annoyed if they have to re-light their cigarettes, manufacturers traditionally used papers and packing techniques that ensured that the cigarettes would burn completely even when not being smoked. This increased the likelihood that a cigarette dropped by a smoker would smoulder long enough to ignite the material onto which it had been dropped.

The proposed solution: self-extinguishing cigarettes.

Proposals to require manufacturers to make their cigarettes self-extinguish if left unattended were presented to U.S. legislators in the early 1970s, but it took almost three decades before any government agreed to it. In 2000, New York State was the first jurisdiction to regulate fire safety standards, which came into effect in June 2004. In 2001, private members' legislation aiming to require the Canadian government to pass such a standard was introduced to the House of Commons by John McKay (C-260, An Act to Amend the Hazardous Products Act, Fire Safe Cigarettes). 

Over the following three years, John McKay's proposal gained the support of the House and Senate and in 2004 it received Royal Assent. Health Canada duly established regulations the following year, replacing the term 'fire safe' with 'reduced ignition potential'. Initially the regulation was connected with the Tobacco Act, but following a subsequent review by a Parliamentary committee, it was  transferred to Consumer Product Safety Act in 2016, where it remains.

The standard adopted by the regulations is set by the ASTM ( ASTM E2187). The Canadian requirement is not that all cigarettes that are tested by this method self-extinguish before the entire rod burns, but that no more than one-quarter (25%) of them do. 

Following New York State and Canada, a number of other countries similarly adopted similar requirements. In 2014, the World Health Organization reported that "all 50 US states, Australia, Canada, Iceland, South Africa, and all 28 European Union Member States have adopted policies requiring RIP cigarettes. These countries represent approximately 20% of the world’s population, consuming approximately 20% of the world manufactured cigarettes and on the whole are mostly large high income nations."

Initially, Imperial Tobacco met the test

During a review by WHO's advisors on tobacco regulation, data from Canada showed that cigarettes manufactured by Imperial Tobacco consistently met the standard:  fewer than 1 in 10 failed the test. By comparison, cigarettes manufactured by other companies (of which there are very few on the market, and most of which were likely made by Grand River Enterprises), initially failed the test but over time met the standard. 

The results of Health Canada's compliance tests conducted before responsibility for the regulation was transferred to the Consumer Product Safety Branch in 2016 remain available on Health Canada's website. These show that all of the brands manufactured by Imperial Tobacco during this period passed the test. Other products that failed to pass the test (including those manufactured by Lanwest, Dynasty and Grand River) were not subject to recall as this system was not in place at the time.  

Are Imperial Tobacco's production woes the reason for the test failures? 

Under the new administration of the regulations, Health Canada does not appear to report the results of its compliance tests, but it is authorized to require a recall of products that do not meet the standard. 

Imperial Tobacco has not made a public statement about the recall (not even on its Twitter feed). The company did,  however, reveal a potential reason for the change in a filing submitted to the Ontario Court that is managing its insolvency proceedings. (All of the Canadian tobacco companies have received court protection from their creditors, arguing that current and future court-ordered damage awards make them insolvent).

Last September, Imperial reported to the court that the pandemic had caused supply problems in their Mexico factories, and that it had shifted manufacture to South America. "production of cigarettes for sale in Canada commenced in Brazil and Chile in May 2020." These factories generally make cigarettes for countries where reduced ignition propensity regulations are not in force.

The consequences 

Despite the potential for irony in governments encouraging consumers to ask tobacco companies to replace faulty cigarettes with ones that are no less harmful to smoke, there are reasons to welcome the transparent disclosure of the ignition test results. 

The effect of the recall is a little more than a slap on the wrist. In addition to the bad publicity, once these products are recalled the manufacturers and retailers have to remove them from the shelves. This inconvenience may be costly, and a deterrent to future infractions.

But there is another shoe that Health Canada could drop. The Consumer Product Safety Act also provides for hefty fines for companies which break the law or its regulations -- including prison terms. If the wrongdoing was made by the corporation, and not an individual acting independently, directors and officers can also be penalized. 

If, as it turns out, the company was aware that its new production facilities were not capable of producing cigarettes that met the Canada standards, a greater penalty may be justified.

Friday 8 July 2022

VEEBA: In a surprise move, PMI launches disposable vapes in Canada

Update: The VEEBA product is manufactured by Bidi Vapor and sold in the USA as the Bidi Stick. In mid-June, the manufacturer made public that it had entered into an agreement for PMI to distribute the product outside the United States. 


This week Canadian consumers and health regulators are facing a significant development in the vaping market, as the world's largest tobacco company introduces VEEBA - an affordable and fancy disposable vape. 

Philip Morris is the last of the big tobacco companies to launching vaping products. It's decision to put its deep pockets and extensive marketing savvy behind cheap and cheerful disposable products may be a marker of a further shifts in the FMCG nicotine market.

Introducing VEEBA

PMI's VEEBA is a one-time use electronic nicotine device manufactured by Philip Morris International (PMI) and distributed in Canada by PMI's subsidiary Rothmans, Benson and Hedges.

Each device is sold with 2 ml of nicotine salt e-liquids containing 20 mg/ml of  nicotine, the maximum nicotine concentration allowed in Canada. The disposable contains almost three times as much liquid as a JUUL pod (0.7 ml) and about the same as in a VUSE epod (1.9 ml), but less than some other disposables sold in Canada (ALLO products, for example, are sold with up to 10 ml of liquid).

PMI suggests that 350 puffs of vapor can be drawn from the device. It uses a 280 mAh battery. 

In provinces without flavour restrictions, the device is sold in 9 flavours. In addition to "classic tobacco", there are 8 colour-themed options.

  • Gold: fruit, citrus, cooling
  • Indiblue: berry, exotic, creamy
  • Blue Mint: minty, creamy, cooling
  • Yellow-Green: fruit, sour, cooling
  • Yellow: exotic, fruit, minty
  • Red: exotic, fruit, cooling
  • Coral Pink: exotic, fruit, cooling
  • Mauve: berry, creamy, cooling
The packaging is more detailed than other disposables currently on the market. The device is enclosed within a plastic box which in turn is inserted into a cardboard sleeve and then wrapped with cellophane. 

A surprise market launch. 

The arrival of this product on the Canadian market came with very little advance notice.  The first public notice that PMI gave investors of its intention to begin selling disposable vaping products was made during a presentation on June 14 to the Deutsche Bank Global Consumer Conference.  This is notable, given that PMI has spoken of other 'reduced-risk' initiatives years in advance of their commercial execution. 

So rapid was the arrival that the supportive website ( is not yet properly on line.  Those arriving at this web address are currently informed that "VEEBA website coming soon!"  

A very affordable option  

PMI's new product is now the lowest-priced disposable vape on the Canadian market. 

The suggested retail price for VEEBA is $9.99, although some retailers are currently listing it for $7.99.  (When the new federal tax is applied this coming October, the price will be increased by $1, which is the new set tax for 2 ml or less of e-liquid).  

By comparison, pods for PMI's new VEEV device cost $12.99 for a package of two, with BAT's VUSE Pods selling for $13.99 for a two-pack. A package of four JUUL pods costs $20.99. Throughout most of Canada, a package of the cheapest cigarette brand costs more than $10. 

For experimenters, including teenagers, VEEBA is now the most affordable nicotine option for trial use. 

Disposables: the increasing choice of young vapers

The rise of JUUL devices and the impact on youth vaping are not yet distant memories, and are a reminder of how powerful product design can be in influencing consumer trial. Globally, tobacco companies have now largely abandoned cig-a-like and tank-system vaping products as they shifted to JUUL-style devices -- think BAT's ePOD, Japan Tobacco's Logic Compact and PMI's VEEV. 

It may be that JUUL is yesterday's fad. Recently, disposable vaping products have emerged as the product with increased use by young people. In some cases, the increase is very dramatic: data from the U.K. released this week showed that one-half of young e-cigarette users had chosen a disposable device -- up from less than one-tenth only last year.

ASH UK: Use of e-cigarettes (vapes) among young people in Great Britain. 2022

PMI is the first tobacco tobacco company to jump on this trend, but is unlikely to be the last.

Why Canada is first. 

At this point, it appears that Canada is the only country in which VEEBA is currently being marketed. PMI may well be using Canada as the test market for this new product. 

Canada has been identified as one of the largest vaping markets, but there are other reasons why PMI is able to market VEEBA here before it can reach other markets. Canada does not have the regulatory and administrative barriers to market entry that exist elsewhere:

Stalled regulatory responses

Affordability is only one reason that young people find disposable vapes attractive. Their small size makes them easily concealable -- and the fact they are thrown out after use further reduces the risk of being caught by parents and diminishes the impact of having products confiscated by school authorities.

Because these products are particularly attractive to youth, some health regulators have taken steps to remove them from the market. In 2021, Belgium proposed a ban on disposable vaping products, on the basis of a now-repeated recommendation of that country's Conseil Superier de la Sante. However, trade-related concerns expressed within the EU appear to have stalled this regulatory initiative.

The United States has begun enforcing its requirements that vaping products by authorized by the FDA. Last year, for example, it directed manufacturers of disposables to remove their products from the market, although the products remain on the market as this enforcement action develops.

Last year, Health Canada stated its intention to move forward with regulations to control youth-friendly product designs. Under consideration were "Regulations Amending the Vaping Products Promotion Regulations (Package and Design Features)" which would be designed with the purpose "to protect young persons and non-users of tobacco products from inducements to use vaping products. The proposed regulations would ... impose restrictions on design features that are appealing to youth to prevent their use in the manufacture of vaping products." The department subsequently stepped back from that intention, however, and did not include it on the regulatory workplan circulated this spring.

No guarantee of success

The market launch of a new vaping device is no guarantee of success for PMI or any other tobacco company. In the four years since vaping products were legalized in Canada, three other multinational tobacco companies have tried to succeed in this market, and two of them have failed:

* Japan Tobacco introduced its Logic Compact in early 2019, but took it off the market less than 24 months later. It no longer sells vaping products in Canada

* Imperial Brands sold myblu vaping devices in Canada from mid 2018 to mid 2020. 

The third company, BAT, was not successful with its first product launches. In May 2018, its initial productws were the eTank (refillable) and eStick (cig-a-like). In September 2018, BAT introduced the ePEN, which looked like a JUUL product but did not work with high-nicotine liquids. In early 2019 the ePOD with its capacity to aerosolize higher concentration nicotine salts was launched. By the end of 2020, only the ePOD remained on the market.