Notes from recent tobacco industry investor reports

Over the past few weeks there has been a flurry of reports from tobacco companies about their business activities over the past year and their plans for the coming months.

• On February 17, BAT issued its preliminary results for 2020 and the next day presented at the CAGNY investor meeting (Consumer Analyst Group of New York) 
• On February 10, Philip Morris International hosted an Investor Day, a week after it had issued its preliminary results for 2020
• On February 9, Japan Tobacco International reported on its preliminary results and its business plan for the coming year
• On February 18, Imperial Brands (which does not have significant operations in Canada) also presented at the CAGNY conference, after hosting an investor session earlier in January.
• U.S.-based Altria also presented at CAGNY this week, and issued its preliminary results last month.

These communications do more than meet the obligations of companies to provide business information to shareholders. Because they are designed to raise the confidence of investors and the business community in the companies, they contain lots of information about how this sector is reorganizing its business focus, refurbishing its image and remaining committed to extending nicotine use.

There is much in these presentations to interest the public health community - this post provides only a sampling. 

_________________________

COVID-19 AND THE GLOBAL TOBACCO MARKET

Cigarette sales were stable in the United States:  

Altria reported that sales in the USA did not fall in 2020, for the first time in 5 years. Altria is the only company to state the total market volume of combustible and other tobacco products in a comparable way. Its depiction of the market in the USA over the past 6 years (slide 4) shows a slight decline (1% per year) in the volume of all nicotine products, from the equivalent of 16.8 to 15.9 billion packages. From the information provided, we can calculate that after 5 years, tobacco sales had fallen by 1.7 billion packages, about half of which (the equivalent of 800 billion packages) was offset by increased sales in oral and e-vapour products. 

The reduction in U.S. cigarette sales may be slowing down. Combining this year's Altria reports with those from previous years shows that cigarette sales are not decreasing at a faster rate in the past 5 years when compared with the previous decade. Between 2007 and 2011, sales fell by an average of 5% per year. By 2020, they fell by only an average of 3% per year.

Compilation of data from Altria's earnings reports

Cigarette sales went down in most other countries. 

Despite this North American experience of increased or stable sales, Philip Morris International reported this month that on a global basis sales were down by 7% in 2020 over the previous year, more than twice the usual rate of decline. (Slide 66) 

Chief Operating Officer Jacek Olczak explained that one of the reasons for the drop was that restrictions on movement and socializing resulted in fewer occasions when smoking was embedded in social rituals  "physical journeys, the bust of the smoking break, the lunch break with colleagues, the evening and beer in the bar, et cetera, all of these things have almost disappeared during COVID time."  He reassured investors that  "social consumption will be a big part of the rebound coming forward."

He illustrated this decline by sharing consumer research on "smoking moments" conducted in 5 different markets, before and during COVID restrictions.  (Slide 67) 

_________________________________

CIGARETTES REMAIN KING

Cigarettes remain the bread-and-butter of tobacco companies. PMI reports that ninety-four cents of every dollar spent in the globalized tobacco market (which excludes China and the USA) is exchanged for a cigarette. (Slide 11)

This is particularly true for developing countries, where BAT sells 70% of its products  and where BAT reported that the overall market did not decrease in the second half of 2020. (Page 7).

REGIONALIZATION OF ALTERNATE NICOTINE PRODUCTS

Cigarettes are the dominant form of tobacco use through much of the world, with some notable exceptions such as India. Over the past decade, these companies have introduced products which they are proposing as alternatives to cigarettes. These recent investor presentations show how regionalized the succesas of these products has besen.

*  Almost all (90%) of modern oral (snus and tobacco-free pouches) is sold in only 6 markets: the USA, Germany, Sweden, Norway, Denmark and Switzerland. 

* Similarly, 90% of revenue from heated tobacco (like IQOS and glo) comes from only 9 countries - Japan, South Korea, Russia, Italy, Romania, Germany, Ukraine, Poland and the Czech Republic. (Page 58 and Slide 16) 

* Only 5 countries account for 75% of the value of vaping product sales. Canada was second on the ordered list - behind the USA, but ahead of the United Kingdom, France and Germany. Given that Canada is one-tenth the size of the USA and half that of the UK, France and Germany, this suggests that per capita expenditure on this category of vaping products is higher in Canada than in any other country. (Page 58) BAT also reported that during 2020 its VUSE devices and liquids out-sold other products on the market. For every $1 spent in Canada on closed vaping systems, 46 cents was spent on a VUSE product. (Page 11)

____________________

FUTURE PLANS - ALTERNATE NICOTINE AND BEYOND

In their recent presentations to investors, PMI and BAT spent more time telling investors about the non-cigarette products they planned on selling than about the ones they currently sold.

BAT profiled ongoing changes to its non-cigarette nicotine products (slide 34):

* VUSE vapour products 

*  GLO heated tobacco products 

*  VELO tobacco-free modern oral 

Investors, of course, are focused on financial returns. BAT noted that their new product categories are a way to woo back former clients and to generate new ones. The company encouraged investors to see that the greater social acceptability of these new products would allow them to recover former smokers ('usage regain') and recruit new clients ('additional' business). (Slide 35)

PMI has concentrated its new product development on its IQOS heated tobacco products, for which new models were talked up (ILUMA and LIL). But this company too will start selling vaping products (VEEV), nicotine pouches and more novel nicotine and tobacco products (P2 and P3). (slides 50-60)

Both BAT and PMI are developing new drug systems that are not focused on nicotine delivery. BAT is already test-marketing cannabis-based CBD vaping liquids. The other drug systems it is working on are spoken about mroe vaguely - products which will deliver "on the go wellbeing and stimulation", "boost energy", help "clarity and focus" and "calm and relax". (slide 36). 

PMI says it is looking at "new adjacent areas" to sell "botanicals" that will provide "new sensorial experiences" "sleep aid", "energy and focus", "calm and control" and systems to provide other drug delivery through the lungs. It also intends to use its growing database of consumers (recruited and monitored through package scans) to offer other non-nicotine products and services. (slide 33-34)

The two other multinational tobacco comapnies (Imperial Brands and Japan Tobacco) seem to have had poorer results with new products and are implicitly scaling back their plans for alternative nicotine products. JTI, for example, does not even mention its once-touted LOGIC vaping systems in this year's business plan. Imperial Brands withdrew its BLU vaping products from Canada last year. 

__________________________

TALKING UP THEIR NEW CORPORATE IMAGE

These presentations also give insight into the public relations focus of PMI and BAT, and their attempts to present themselves as the solution to the tobacco problem, not the cause.

ESG (Environmental, Social and Governance) issues are front and centre, no longer relegated to supplementary reports as they were in the past. Altria's CAGNY presentation this week illustrates how they area contextualizing their new business lines and regulatory priorities in the ESG framework. (slide 5). 

Their recently-trademarked slogans reflect their transformation goals: PMI is "delivering a Smoke-Free Future", BAT has "A Better Tomorrow", Altria is "Moving beyond smoking." 

________________________________

DISSING ON THEIR OPPONENTS

The companies are not only more openly promoting their agenda, they are more openly slagging their opponents. The presentation by PMI CEO Andre Calantzopoulos is particularly clear in how they want investors (and regulators) to see those whom they see as standing in the way of their ambition.

Regulators risk being confused by "dogmatic opposition", "ideology", "retribution" of "lavishly-funded" groups who are "afraid to be stigmatized". It was this opposition, not the companies, that "effectively perpetuates smoking". The World Health Organization is clearly in PMI's cross-hairs: "WHO anachronistic positions based on special interest influence and funding, not facts and science." (slide 25)

How Canadians compare: we smoke less, are a little more likely to vape or drink heavily and a lot more likely to toke.

This week the Canadian Institutes of Health Information released the results of a health survey conducted simultaneously in Canada and 10 other developed countries. Between March and June last year (in the first wave of COVID-19), surveyors asked more than 5,000 adult Canadians about certain health behaviours and about their access to health-care services. The same questions were put to adults in 7 European countries (France, Germany, Netherlands, Norway, Sweden, Switzerland and the United Kingdom), and also in the United States, Australia and New Zealand. 

The Commonwealth Fund's 2020 survey of the General Population is sponsored by the U.S.-based health charity the Commonwealth Fund, and partnered in Canada by CIHI and provincial agencies.

The survey asked about commonly-used drugs use. These included questions on the use of tobacco and e-cigarettes, heavy drinking, and cannabis use. This blog presents data from the survey which can be downloaded from CIHI.

Tobacco use is lower in Canada 

This survey found that one in five (21%) Canadians identified as a smoker, 15% on a daily basis and 6% on an occasional basis. On this score Canada did better than in all but 3 countries - the USA, Australia and New Zealand.

This is noticeably higher than the estimates produced by other government surveys (15% in 2019 for the Canadian Community Health Survey and 12% in 2019 by the Canadian Tobacco and Nicotine Survey.) In addition to the inherent fluctuations of survey estimates, the design of the survey may also have produced higher results: it did not include people as young as 12 and 15 as the other surveys did, it asked about all tobacco use, and not just cigarette smoking, and it the nature of the study may have encouraged different types of people to participate. The response rate of this study was 19%, compared with 44% for the CTNS (8,500 respondents). 

By asking about all tobacco use, the surveyors avoided one of the challenges of comparing cigarette-smoking countries (like Canada and Australia) with countries where oral tobacco is more common (the U.S.A, Norway and Sweden).  

Vaping is higher  in Canada 

Canada is among a small set of countries which have higher vaping rates - outflanked only by the USA, France, the U.K. and New Zealand.

The view of Canada as a heavy-vaping country was reinforced by a presentation made by Philip Morris International to investors earlier this week. In it, the company included Canada among the 8 countries which made up almost two-thirds of the vaping market outside the USA and China. Others in this group included France, Germany and the U.K.

For this behaviour, this survey produced very similar results to the Canadian Tobacco and Nicotine Survey, including for the age-breakdown that was provided for vaping behaviour. Both surveys found that vaping was higher for those under 35 years of age (11%), compared with 2%-3% for those over 35 years old. 

Canadian clinicians counsel one-half of smokers to quit

Canada is middle-of-the-pack when it comes to providing smokers with advice or assistance to quit smoking.  

Canada is 'average' when it comes to heavy drinking.

Canadians may think of Australians and the French as heavier drinkers, but when it comes to drinking in excess of lower-risk guidelines, Canadians are in the same ball-park.

Canadians are much more likely to use (or to admit using) cannabis

This survey found that one-quarter of Canadian adults had used cannabis in the past year, three to four times the rate in Europe and double the rate in Australasia. The findings are consistent with other government surveys of cannabis use. 

The Canadian Institutes of Health Information has made their reporrt and data tables available here. 

BAT targets Canadian vaping market with higher nicotine and more flavours

This post reports on our recent review of BAT's vapour product offerings  in the 18 other countries.in which it operates a country-specific web-site. 

From an inventory of the different devices and liquids they sell, it is apparent that BAT sells higher nicotine concentrations in Canada than it does in most other countries and that BAT sells more flavours for its high-nicotine ePOD device in Canada than it does in any other country.

Low-nicotine devices are gone. High nicotine device remains

Last week Imperial Tobacco Canada (BAT) sent an e-mail informing its Canadian clients that it was withdrawing the ePEN device and that the EPOD was their only remaining vaping product in this country.

 eTank, ePen, eStick
Introduced to Canada in 2018
withdrawn by 2020

Over the past 31 months, BAT has introduced 4 vaping products into Canada and has withdrawn 3 - the eStick, the eTank and the ePen. 

The devices they pulled from the market are those which were designed to use lower-concentration nicotine liquids. 

The device they continue to sell is the one designed to be used with higher-nicotine (salted) liquids, which was introduced by BAT in January 2019 as a competitor to JUUL. 

This device, notably, is reported by BAT to now be the market leader, with 40% market share by value.

BAT has not withdrawn the lower-nicotine pod devices from most other markets (other than Kuwait). Although the e-Tank has generally been withdrawn, there are few signs that BAT is replacing the ePEN with teh ePOD in many othe rmarkets -- and only the lower-nicotine ePEN is offered for sale in Latin America and Italy. 

The ePOD was introduced
in Canada in January 2019.

BAT markets its e-cigarettes differently in different markets.

As we reported earlier, over the past year BAT has further globalized its vaping products, and sells the same product lines through near-identical web-sites in North America, Europe, Latin America, the Middle East and New Zealand. We conducted an inventory of the products offered for sale through global sites in January 2020 and again this month. 

In one year, BAT has nearly tripled the number of ePOD flavours in Canada

Over the past year, BAT has more than doubled the number of flavours offered in Canada for its ePOD device. In January 2020, there were only 8 flavours offered, and a year later the number had grown to 22. The range of tobacco flavours has increased from 1 to 4 (Golden Tobacco, Aromatic Tobacco, Smooth Tobacco, Rich Tobacco); mint and cooling flavours has increased from 1 to 3 (Smooth Mint, Cool Peppermint, Polar Mint); fruit flavours have increased from 5 to 12 (Watermelon, Cucumber, Berry, Lemon Berry, Passionfruit, Blueberry, Peach, Mango, Blood Orange, Strawberry, Lychee and Pinapple Melon), and from 1 to 3 other flavours (Flavourless, Vanilla and Citrus Gin).

BAT sells more ePOD flavours in Canada than elsewhere 

BAT sells the ePOD with fewer than half as many flavours in other countries. In Europe, the number of flavours offered by BAT ranged from 5 to 12. In the U.S.A. there are only 3 flavours and in other countries no more than 9. 

BAT sells higher nicotine liquids in Canada than in most other countries 

The European Union restricts the amount of nicotine that can be sold in vaping liquids to 20 mg/ml (a regulation that Health Canada is also proposing). But in Europe, the majority of products offered for sale by BAT fall well under that maximum. Of all the vaping liquid options they sell in the United Kingdom, for example, three-quarters (75%) are for liquids with less than 18 mg/ml of nicotine. The situation is similar in France (89%), Belgium (75%), Germany (82%), etc. 

In Canada the situation is reversed. Only 15% of BAT's vaping liquids offered for sale have nicotine levels lower than 18 mg/ml. After the withdrawal of the ePEN liquids, that percentage will drop to 3%. The only other countries demonstrating a predominance of high-nicotine are Kuwait, New Zealand and the United States. 

The law of supply and demand

Regulatory differences, like maximum nicotine levels, explain some of the differences in BAT's market offerings between countries. But there are other differences that may drive different patterns of use and sale. 

In Canada, the vaping market is one where half the customers are teenagers and young adults, half are using vaping products as a form of recreational drug (not as a way to quit smoking) and 40% are never smokers. (Statistics Canada CTNS, 2019). In the United Kingdom, by contrast, the vaping market is one that largely serves older customers who are former smokers - only 4% are never smokers. (UK Office of National Statistics, 2019). 

Because of these differences in markets, products and usage, research conclusions on the impact of vaping on nicotine and tobacco use may not be generalizable.

Download fact sheet: 

• BAT marketing of VUSE/VYPE A comparison of British American Tobacco’s marketing of the Vype e Pen 3 and Vype ePod in Canada and elsewhere (January 2020 and 2021).

Three Years Later: The NASEM report on E-cigarettes

This week marks three years since the US National Academies of Sciences, Engineering and Medicine (NASEM) released a report commissioned by the U.S. FDA on the "Public Health Consequences of E-cigarettes." Since then, this report has often been cited as a definitive source for questions about the safety of e-cigarettes, and is a primary source for Health Canada's encouragement to smokers to switch to e-cigarettes. 

Thirty-six months later, however, the conclusions in this report are increasingly stale-dated. The panel of scientists who wrote the report looked only at evidence available before August 2017 - and for some key issues (like heart and lung diseases) there were virtually no published studies available for them to consider.

Since then there has been a marked growth in scientific evidence about these products. Of the approximately 7,000 studies on e-cigarettes listed in the U.S. National Library of Medicine, more than half (57%) were published after 2017. From today's vantage point, the NASEM report tells less than half the story. 

In general, these more recent studies have provided evidence on health hazards where there previously had been none and have strengthened those links that had already been identified. Newer studies have also dashed the hopes inferred from the NASEM report that these products could be effective for population-wide smoking cessation.

1. The NASEM report, even in 2018, did not provide all we needed to know to regulate e-cigarettes

The NASEM report was a weighty tome of nearly 800 pages. Perhaps because of its weight, many mistakenly considered it encyclopaedic, containing all the information one would need to know about e-cigarettes. 

But there were key aspects of the e-cigarette issue which were not addressed by this report. Notably it did not consider nor predict that there would be an explosion of vaping among young people in Canada and the United States. ( By 2019, there were 700,000 vapers in Canada under the age of 25, one-half of all vapers). 

The report did not analyze the behaviour of tobacco and vaping industries. It did not predict that the tobacco industry would come to dominate the vaping market, or consider the evidence that would predict the impact of their doing so. It did not analyze the impact of the industry developing  nicotine salt products, or anticipate that these higher-nicotine versions would soon domiate the market and accelerate the addiction of (mostly young) people to nicotine. 

It did not predict or analyze the imapct of e-cigarettes becoming a consumer product used for recreational drug purposes as much as to avoid smoking cigarettes, or that the marketing of these as consumer products would result in their not proving effective at helping people quit smoking.  It dismissed the likelihood that the e-cigarette could increase harm, and did not forecast that the prevalence of nicotine use  among young people would increase  dramatically as a result. 

2. The NASEM report has been misinterpreted as endorsing e-cigarettes

Perhaps spurred on by the hope that e-cigarettes would be an effective mass smoking cessation aid, some seized on just a few of the NASEM conclusions that seemed to suggest some benefit of
e-cigarettes to guide policy, but ignored the others. A careful reading of the whole report and the analysis behind its 47 conclusions would have led to a more cautious approach. 

3. Five adverse health outcomes where NASEM concluded "no available evidence" in 2017: an update

The NASEM panel qualified its conclusions by level of evidence: conclusive, substantial, moderate, limited, insufficient and no available evidence. The five areas where they found "no available evidence" illustrate the current limitations of using the NASEM report for policy development:

Cardiovascular disease

"There is no available evidence whether or not e-cigarette use is associated with clinical cardiovascular outcomes (coronary heart disease, stroke, and peripheral artery disease) and subclinical atherosclerosis (carotid intima-media thickness and coronary artery calcification)." (NASEM, Conclusion 9-1).  

The evidence void identified in NASEM has been addressed by several groups of researchers. These include a comprehensive review of preclinical and clinical studies, identifying pathways by which "chronic e-cigarette use could increase the development of CVD.", as well as review of experimental studies of effects on animals, human tissue and humans ("Most studies suggest potential for cardiovascular harm from electronic cigarette use."). Clinical tests have found the vascular effects of e-cigarettes to be the same as tobacco. A cross-sectional study of 450,000 people, representative of the USA population found that  "dual use of e-cigarettes + combustible cigarettes was associated with 36% higher odds of cardiovascular disease."

While longitudinal studies are still lacking, current evidence that e-cigarette use increases the risk of heart disease would now likely be considered moderate or substantial.

Cancer

"There is no available evidence whether or not e-cigarette use is associated with intermediate cancer endpoints in humans. This holds true for e-cigarette use compared with use of combustible tobacco cigarettes and e-cigarette use compared with no use of tobacco products." (NASEM, Conclusion 10-1)

Many people believe that the fact that e-cigarettes have fewer carcinogens than cigarettes makes them safer. While fewer cancers may result from vaping than from smoking cigarettes, the risk of cancer is not necessarily reduced in lockstep with the reduction in numbers and amounts of carcinogens. There is no safe level of exposure to carcinogens.

Since 2017, researchers have found that e-cigarette aerosol contains carcinogens that damage DNA, that e-cigarettes deregulate genes associated with cancer, and that e-cigarette vapour induces cancer in mice. Because of the long lag time between exposure and later cancer, some cancer researchers are calling for tighter regulation. 

Respiratory diseases

"There is no available evidence whether or not e-cigarettes cause respiratory diseases in humans." (NASEM, Conclusion 11-1). 

As we recently reported there have been many recent studies of e-cigarettes and respiratory diseases.  They include studies with strong methodologies like meta-analysis and examination of longitudinal data.  

Far from no evidence, the newer evidence linking vaping to respiratory disease would likely now be considered substantial or conclusive.

Pregnancy Outcomes

"There is no available evidence whether or not e-cigarettes affect pregnancy outcomes." (NASEM, Conclusion 11-1).

Subsequent to the NASEM report, other reviews of the evidence have concluded that nicotine consumed from e-cigarettes was similar to that consumed from combustible cigarettes and that "the ideal situation for both mother and fetus would involve complete cessation of all nicotine-containing products."  After following large populations of U.S. women during pregnancy, researchers have recently concluded that e-cigarette use  "is not a safer alternative to [conventional cigarette] smoking during pregnancy."

An updated version of NASEM would likely conclude there is limited evidence that e-cigarettes negatively affect pregnancy outcomes. 

Dual Use

"There is no available evidence whether or not long-term e-cigarette use among smokers (dual use) changes morbidity or mortality compared with those who only smoke combustible tobacco cigarettes." (NASEM, Conclusion 18-3).

Dual use of e-cigarettes and combustible cigarettes is very prevalent - four in 10 Canadian vapers also smokes cigarettes (only 25% are former smokers). Research subsequent to NASEM by researchers using data from heart studies and general population studies have concluded that using both e-cigarettes and conventional cigarettes is likely more harmful than only smoking.

4. More recent scientific evaluations found more evidence to support precautionary approach. 

The NASEM report was commissioned by the American Food and Drug Administration in 2016.  Last year health reviews were published that had subsequently been commissioned by other health authorities, including the World Health Organization, the European Union, and governments in Ireland, the Netherlands, Australia and Spain.

In February 2020, the World Health Organization concluded "ENDS [electronic nicotine delivery systems] on their own are associated with increased risk of cardiovascular diseases and lung disorders and adverse effects on the development of the fetus during pregnancy. ENDS are undoubtedly harmful, should be strictly regulated, and, most importantly, must be kept away from children."

In September 2020, based on evidence available up to April 2019, the European Union's Scientific Committee on Health, Environmental and Emerging Risks (SCHEER) found evidence linking e-cigarette use to respiratory disease, heart disease, to adolescent smoking and to addiction.

In June 2020 the Irish Health Research Board reported that "e-cigarettes were not more effective for smoking cessation than approved nicotine replacement therapies (NRTs), which questions the need for e-cigarettes as a smoking cessation intervention. In the second review, we found that e-cigarettes were associated with initiation of conventional cigarette smoking among adolescents, which identifies a potentially serious harm."

In April 2020, the Trimbos Institute reported to the Dutch government that "Newer studies provide more and more indications that the use of an e-cigarette could lead to damage to the respiratory tract and the cardiovascular system."

Reviews on the impact of e-cigarettes on tobacco use conducted for the government of Australia by that country's National Centre for Epidemiology and Public Health concluded that e-cigarettes did not help people quit smoking, but did increase the probability of a young person starting to smoke. In its own review, the Australian Ministry of Health felt that current evidence on the direct health harms associated with e-cigarettes justified taking a precautionary approach.  

A 2020 Spanish Health Department report states that the adverse short-term effects on the respiratory system are similar to those of cigarette smoking.

5. Federal advice to Canadians is not keeping up with science

The Canadian government has not yet commissioned an independent review of the evidence assessing the public health impact of e-cigarettes, although it reports that it does in-house reviews. 

Currently, its advice to use cigarettes as cessation products and on the risks of vaping does not include references to research conducted after 2017. Its main messages on health effects do not specify health risks other than those associated with nicotine. 

Health Canada's advice on the health risks of vaping
does not identify risks other than those related to nicotine

One year later: Weedless Wednesday Advice from the Chief Medical Officers of Health

Last year, about 6 weeks before Canada and the world became gripped with the COVID-19 pandemic, Canada's Council of Chief Medical Officers of Health (CCMOH) issued a collective statement related to the highly-transmissable vaping variant of the older tobacco pandemic.

The occasion was, like today,  Weedless Wedneday. 

On Wednesday, January 22, 2020 the CCMOH issued their third joint statment on "Nicotine Vaping". In it, they called on governments to shift their approach to vaping so that these products were used only as a way to end nicotine use. They specified about two dozen "regulatory and policy recommendations that we believe are necessary to be taken by federal, provincial/territorial and municipal governments to address this rapidly emerging public health threat."

This post reviews actions that have been taken in the past year to respond to these recommendations. A more detailed and referenced score-card  noting areas of achievement and non-action can be downloaded here.

In the past year, virtually all governments have strengthened controls on the vaping industry.

In the past 12 months, seven (Alberta, British Columbia, Nova Scotia, Newfoundland and Labrador, Ontario, PEI, Saskatchewan), and three territories (Yukon, Northwest Territories and Nunavut) as well as the federal government have advanced regulatory controls on e-cigarettes. Two other provinces (New Brunswick and Quebec) have also indicated their intention to do so.

* Two provinces have adopted bans on all flavourings except tobacco flavour (Nova Scotia and Prince Edward Island), and one territory has introduced legislation to that effect (Nunavut). Health Canada and Quebec have indicated they plan to do so. Ontario and British Columbia restrict the sale of some flavourings to adult-only specialty stores.

*Two provinces have banned the sale of high-concentration nicotine liquids (over 20 mg/ml) (British Columbia and Nova Scotia). Ontario limits the sale of higher concentration liquids to specialty stores. Health Canada recently introduced regulations to cap nicotine concentration at 20 mg/ml.

*Three provinces have imposed new taxes on vaping products (British Columbia, Nova Scotia and Newfoundland), and one province (Alberta) has signalled it intends to.

* One province has increased the minimum age for vaping (and tobacco) products to 21 (Prince Edward Island).

*Across Canada, vaping promotions which can be seen by children have been made illegal (as a result of federal regulations). Some provinces already had these measures largely in effect.

*One province has moved towards plain packaging of vaping products (British Columbia)

*Mandatory health warnings are now required on vaping products (as a result of federal regulations)

*Three provinces have implemented provincial retail licensing systems (British Columbia, Nova Scotia and Newfoundland and Labrador). Quebec already had registration requirements in place.

After a challenging year, much work is left to be done.

The progress across Canada to better protect young people from tobacco-vaping companies is all the more remarkable given the overwhelming need to address the COVID-19 crisis. Hopefully in the coming months additional provinces will be able to follow the jurisdictions which have put taxes in place to address the affordability of vaping products for youth, have banned flavours, have increased the age to 21, have used plain packaging to end package-based promotions, etc. In addition to these measures, last year's statement provided many other actions governments should take to properly administer this important public health file.

A key recommendation has been shunned.

The CCMOH called for a new approach to regulating alternative nicotine products, one which was based on allowing them for sale to adults "if they are proven effective in decreasing or stopping the use of all nicotine-containing products."  They also called for governments to regulate "such devices as equivalent to tobacco products" and to encourage smokers to use them ONLY to end all forms of nicotine use. No Canadian government has yet acknowledged these recommendation or indicated support for them.

The same companies which are driving the vaping epidemic have signalled their intention to sell other forms of nicotine and to move "beyond nicotine" (to cannabis-based products like CBD). Regulatory frameworks to manage these new risks are not yet in place.

51,700 reasons for Canadians to observe National Non Smoking Week.

For over 40 years, the third week in January has been an occasion to encourage Canadian smokers to quit and to focus attention on measures that help reduce tobacco use. This post uses the beginning of this annual event to report recent estimates of the number of Canadians whose premature deaths were caused by smoking.

Annual tobacco deaths in Canada now exceed 50,000

In October, the Lancet published updated estimates produced by the Global Burden of Disease Study group. This global research effort has been ongoing since 1990. It was original hosted at the World Bank and the World Health Organization and was more recently adopted by the Institute for Health Metrics and Evaluation (IHME). 

When this study began in 30 years ago, tobacco was found to be responsible for about one-quarter (28%) of Canadian deaths, by coincidence about the same percentage as the proportion of Canadians who were smoking at that time. By 2019, smoking rates had fallen by about half (to 15%), but because of the lengthy impact of smoking, the GBD found the proportion of Canadian remained high, at 51,700 deaths or 18% of all deaths. After 30 years of public health effort, the mortality from tobacco industry products fell from one-in-four Canadian deaths to one-in-five-and-a-half.

The GBD looked at the death impact of three different sets of risk factors: behavioural, environmental and occupational and metabolic risks. Of Canada's 284,000 deaths last year, this study attributed 162,000 deaths to 87 risk factors. Among the individual risk factors in these categories, tobacco use was the single largest individual risk to contribute to Canadian mortality. 

The GBD estimated of 51,700 deaths attributable to tobacco use (active and passive smoking and chewing tobacco) is a somewhat higher number than the estimate published earlier this year by the Canadian Centre for Substance Use of 47,700 deaths caused by smoking in 2017.

1.2 million Canadian life years lost to tobacco in 2019

Another measure considered in this report was the loss of heatlhy life years to each risk factor (Disability-Adjusted Life Year, DALY). Even though tobacco-caused deaths are typically later in life,  tobacco was nonetheless the predominant individual cause of Canadian DALY's. As with deaths, tobacco was the largest individual contributor to healthy life years lost, with the more than a million life years lost to tobacco in 2019 representing about 10% of the Canada's total DALY burden.

A separate analysis which was published by this group looked at deaths from specific diseases and injuries. Smoking, for example, is a risk factor for lung cancer, stroke, COPD and a host of other diseases. One report focused, the other on disease and injury. This research was pre-COVID, and did not include the 2 million (and climbing) COVID-19 deaths world-wide or the 18,000 (and climbing) deaths in Canada. 

Data taken from: 

GBD 2019 Risk Factor Collaborators. Global burden of 87 risk factors in 204 countries and territories, 1990–2019: a systematic analysis for the Global Burden of Disease Study 2019. Lancet. October 17, 2020. Data for Canada can be downloaded here.

GBD 2019 Diseases and Injuries Collaborators. Global burden of 369 diseases and injuries in 204 countries and territories, 1990–2019: a systematic analysis for the Global Burden of Disease Study 2019. Lancet, October 17, 2020.

BAT's new trademarks hint at new vaping promotions

In the less than the 3 years that vaping products have been legal for sale in Canada, British American Tobacco (BAT) has shown itself to be one of the most agressive marketers of vaping products in this country. Its shareholders have been rewarded by these efforts, and the company recently informed them that its VUSE brand had a 40% share of the Canadian vaping market.  

But changes in federal and provincial laws have forced the company to find new ways to encourage Canadians to their new nicotine products - (addiction makes repeat customers easier to recruit.) 

Over the past year federal and provincial governments have clamped down significantly on vaping promotions. Retail displays like the one shown here were long banned in many provinces, but were removed from Ontario Convenience stores only 12 months ago. In the summer such displays became illegal across the country, when federal regulation also made it illegal for manufacturers to promote vaping products "by means of advertising done in a manner that allows the advertising to be seen or heard by young persons."

Previous posts have reviewed how BAT is adapting its marketing to these new restrictions. This post looks at recent trademarks registered by the company and what they might suggest about its new marketing stratregies.

1) Sell Local. Promote Global

The VYPE brand is gone and the VUSE brand has taken its place, although the product and design elements remain. During the past year, British American Tobacco standardized the name of its line of e-cigarettes, creating uniform branding across all of its global markets. 

In recent months, BAT has transferred the VUSE trademark from U.S.-based Reynolds American to its global nicotine brand, Nicoventures. More than a dozen new VUSE trademarks were registered in Canada this past year.

This action signals the company's intent to benefit from platforms with global reach, like Instagram, Youtube, Tiktok and others. Global branding creates brand re-inforcement among advertisements, promotional videos and messages posted by paid and volunteer influencers. It exploits regulators' reluctance to clamp down on cross-border promotions. 

2) Don't forget the tried and true - Race cars, pretty women and concerts

"Inspiration" is a word that is now commonplace in VUSE-promotions. Noteworthy this fall was their "Routes of Inspiration" series that conencts the traditional marketing vehicles for aspirational tobacco marketing -  racing, fashion, music and art.  

The trademark for "Routes of Inspiration" was formalized in Canada this December and is currently being used with a three-way partnership among the band Rudimental, the Maclaren racing team and BAT, to e-concerts by various artists, profiles of the creative process, and collaborations with other concert promoters and lifestyle influencers. 

3)  Generate brand engagement

Last May, the related trademarks "V X U" and "Vuse X U" were registered in Canada and a number of other countries. This trademark is used to promote brand engagement through the personalization of a customer's vaping device. 

Users can choose their own designs of their vaping products, even by transferring the sound of their voice into a digitized design. 

 "Create your own custom engraving with our collection of patterns, mini icons and text. Or engrave your voice with our new audio signature." "Audio Signature - Coming soon"

Captured from Vuse Canadian web-site January 1, 2021

4) Use branding to increase the impact of flavours

BAT may be using branding techniques to intensify the value of flavours to vapers and potential vapers. Its use of powerful logos, interactive web-design, animation, music and exotic names could be expected to increase the intensity of the flavour experience and the importance of the flavour to the user. 

Nicoventures (the branch of BAT which sells e-cigarettes) has developed origami (folding) logos for its many flavours. Trademark applications for 23 origami flavour designs were filed this fall in Canada and elsewhere. These designs are used worldwide in e-cigarette packaging and promotions - they are beautiful to look at and are even more impressive when spinning in animation within Instagram and other promotions!) 

Blue-Grape Origami
Trademark 2070285

Another marketing tactic to generate engagement with flavours is to refresh the menu of flavour options. The number of flavours available has expanded greatly:

* Last year this time, the Vype-Vuse epod was sold in only 8 flavours: Tobacco Marvel, Vanilla Medley, Polar Mint, Berry Blast, Mango Wonder, Blood Orange, Garden Strawberry, Infused Cucumber. 

* Over the past 12 months, the number of flavour choices has been expanded greatly. Where there was previously only one tobacco flavour, there are now four: Aromatic Tobacco, Golden Tobacco, Rich Tobacco and Smooth Tobacco. 

Sixteen non-tobacco flavours are now on offer for sale in Canada: Aromatic Tobacco, Berry, Blood Orange, Blueberry, Citrus Gin, Clear (flavourless), Cool Peppermint, Cucumber, Golden Tobacco, Lemon Berry, Lychee, Mango, Passionfruit, Peach, Pineapple Melon, Polar Mint, Rich Tobacco, Smooth Mint, Smooth Tobacco, Strawberry, Vanilla, Watermelon. 

* 11 additional flavour names and designs have recently been trademarked in Canada: Blended tobacco, Blue Grape, Coconut Cream, Dark Cherry,  English Tea,  Fresh Apple, Indigo Blackcurrent, Rich Raspberry, Simply Banana, Velvety Pear. (Registering a trademark, of course, does not establish that a product or flavour will be marketed, but it does provide evidence of a marketing strategy.) 

5) Charge Beyond (TM) national borders

Despite federal and provincial reguations, BAT's promotions for e-cigarettes are available to anyone with internet access through social media posts and videos, or even news releases. The new Inspiration concert and racing events complement and extend other "#inspiration" messages used to promote VUSE in social media. They are a further development of the company's  "charge beyond" campaign of last year.

BAT is able to use social media platforms to connect lifestyle messages with putatively information advertising. The Instagram page shown here for #VUSE (accessed on January 5, 2021), for example, includes a legal promotion for a new citrus-gin flavour displaying a health warning mandated by Canadian regulations (bottom left). 

But to reach this promotion, the viewer will also take in 8 other promotions linking VUSE with lifestyle imagery. These appear to be user generated, but on closer inspection are uploaded by individuals who identify themselves as professional models or brand ambassadors, or by BAT companies operating outside Canada.  

6) Charge Beyond (TM) nicotine 

Although BAT has not openly discussed plans to sell cannabis or hemp-based products, last year it BAT registered the trademark for "CBD Zone" in Canada. On its UK web-site it is currently offering these products for sale in Manchester. CBD is a controlled substance in Canada, but there are no legal barriers in Canada to BAT expanding its business scope into cannabis-based products.

7) Defend your trademarks only if it is your advantage to do so.

By trademarking the terms that are used to connect these ads (like #vusechargebeyond, which was trademarked last year), the companies can presumably use their intellectual property rights to decide who can contribute to their social media presence, and who cannot. Those who use their trademarks in ways the company does not like can be required (or strongly encouraged by lawyers' letters) to remove them. 

As content owners, they can also request and insist that Youtube and other social media platforms block the transmission of their content into certain countries. 

Currently BAT does not appear to have taken measures to ensure that Canadians do not see content using their trademarks.

Last year the United Kingdom advertising regulator directed the company to cease using Instagram for promotions. BAT subsequently made its UK Instagram account "private" but did nothing about its many other Instagram accounts.