Friday, 4 August 2017

Trying to put a glow on i-Glo.

The Vancouver Sun reported this week on - yet another! - trip to Vancouver by Jorge Araya, the  head of British American Tobacco's Canadian subsidiary, Imperial Tobacco.  Mr. Jorge Araya is a relative newcomer to Canada (he arrived in January 2015), but he is clearly a seasoned tobacco pro.

De-coding Mr. Araya

The occasion for this visit was a speech before "a small group gathered for a Canadian Club of Vancouver luncheon." The text of his comments has not been made public, just as his speech at a bespoke Vancouver a month earlier were not released.

Fortunately, an interview between Mr. Araya and Derrick Penner of the Vancouver Sun is available on that newspaper's website. It suggests that Imperial Tobacco's messaging (and strategy) are not all that much changed over the past decades.

  • A product-based solution
    As in earlier decades (think filters or "light"cigarettes), BAT is asking governments to hitch their hopes for a healthier future to their wagon of new-styled tobacco products.

    In the present instance, the product is called iGLO - a new device by which nicotine and byproducts are inhaled as a result of tobacco being heated with an electric element instead of being burned by fire. The iGlo electric heater, shown below, is purchased separately. The cigarette-resembling sticks are sold in multi-packs of 60 and are branded the same as the company's leading aspirational brand, du Maurier.

    iGlo is very similar to iQOS, which is manufactured by BAT's global rival, Philip Morris International, and which was launched in parts of Canada at the beginning of the year. 

  • An alignment claimed with health authorities and the law
    Mr. Araya claimed that by marketing this new product, his company was acting inline with the science and opinion of health leaders. He evoked the World Health Organization and "to a certain extent" Health Canada. "They are acknowledging that these next generation products, or reduced risk products, are the way forward and the only solution to reduce smoking rates in Canada and in the world."

    Because society and consumers want these products, Mr. Araya said, "we have a duty of care to offer them."
  • A liberal market as the best option for health
    To Mr. Penner's question about what the company wanted from government, Mr. Araya quickly rhymed off three requests that are essentially the same as the industry has pushed for since the early 1960s: for governments to carry responsibility for health outcomes, for the right to advertise and for low taxes.

    "Consumer are scared of the quality of these vaping products... we need very clear product standards so that people trust these products."
    "We need to be allowed to tell consumers that these products are 90% safer than other products."
    " [We are asking for] reasonable taxation. These things are expensive. We need to make money out of it and consumers need to be able to afford these products."
What Mr. Araya did not say.
  • Taxes for iGLO are more than reasonable:
    Mr. Araya did not mention that heat-not-burn cigarettes are already taxed at a much lower rate than regular cigarettes. Each combustible cigarette in B.C. is taxed at about 35 cents, but the new products are taxed on a weight basis set for oral tobacco. If my estimation of the weight of each stick is .3g, the tax per stick would be about 11 cents - or about two-thirds lower than cigarettes.
iGLO flagship boutique,
  • B.C. is one of only 3 provinces where BAT can sell iGLO.
    Mr. Araya said the reason iGLO was launched in Vancouver was the consumer interest there and its culture of being "early adopters in new trends." Not mentioned was the fact that the product is not legal for sale in most other provinces, because it is made with menthol and citrus-flavoured tobacco. Only British Columbia, Saskatchewan and Manitoba have not banned flavoured tobacco. The federal ban on menthol, slated for implementation in October, does not apply to products which are not specified in the regulations, and will not therefore affect the sale of iGLO in B.C.
  • BAT's iGLO warnings fall short of international standards.
    Unlike PMI, BAT has opted to not use one of the health warnings developed by the federal government. Instead they are using one of their own invention and occupying only a small portion of the package. (The hole in federal regulation which this reveals has been the subject of a recent letter to the Minister of Health).
In the absence of any meaningful or transparent government consultation on the future of combustible products and the usefulness (or not) of vaping and heated tobacco products to replace them, it is only when business puts its head above the ramparts that the public is made aware of the content of their regulatory proposals.

A counterpoint can be found in the United States, where the FDA announced only last week that it was looking at a way to connect approval of sale of next generation products with regulatory changes aimed at reducing (or ending) the use of combustible cigarettes.