18 May 2019
With health authorities stubbing out much of Big Tobacco’s business, and vaping on the rise, one of the industry’s biggest players says it plans to stop selling cigarettes. Is that just hot air?
Filipinos have always been among the world’s most enthusiastic smokers. According to the World Bank, more than 40 per cent of Filipino adult men smoke. Cheap tobacco and lax regulation has made smoking a way of life, and death, with health experts estimating that about 10 Filipinos die every hour from smoking-related illnesses. Lighting up has even become part of national mythology, in the form of Kapre, a nocturnal ogre who spends most of his time sitting in the fork of a mango tree, sucking on cigars the size of a chair leg. If you find yourself lost in the forest, and suddenly smell tobacco smoke, chances are you’ve strayed into Kapre’s crib.
For the past 10 years, however, the city of Balanga, near Manila, has been trying to buck the trend, bringing in some of the most progressive anti-tobacco measures in the country. In 2010, the council passed the Comprehensive No Smoking Ordinance, banning the use, sale, distribution, advertisement and promotion of cigarettes in the commercial centre. In 2016, the ordinance was expanded to include almost the entire city. That same year, the city enacted the Tobacco-Free Generation Ordinance, which denies the sale of cigarettes to anyone born after January 1, 2000.
“We are very proud,” Balanga mayor Francis Garcia tells me. “We have introduced a new normal, where one doesn’t normally see anyone smoking around them on a daily basis, and we have fostered a generation of young adults who have grown up in a smoke-free environment.” According to Garcia, the smoking rates in Balanga have more than halved since 2010.
A sleepy city of 96,000, Balanga is built around the Plaza Mayor, a paved square, lined with palm trees and framed by Spanish colonial facades and an 18th-century cathedral. Originally an agriculture and fishing town, it has in the past decade set its sights on becoming a technology and investment hub, with an emphasis on higher education. The mayor’s anti-smoking measures have been part of a push to make the city more liveable, with the ultimate goal being to turn it into the Philippines’ first “model university town”, along the lines of Cambridge, Oxford or Harvard.
But not everyone has gotten on board. In August 2017, the city was sued by the Philippine Tobacco Institute (PTI), a front group for the world’s biggest cigarette companies, including Philip Morris International and British American Tobacco. The PTI, which is widely regarded as the most powerful tobacco lobby in Asia, argued that the city’s 2010 ordinance, and its 2016 amendment, created “unwarranted restrictions that are arbitrary and oppressive”. According to the PTI’s lawyers, the measures would cost Philip Morris 15,000,000 pesos (about $420,000) a month in lost sales. In July 2018, after a year in court, a regional judge found in the PTI’s favour, noting that while Balanga city’s anti-smoking efforts were “commendable”, they were also “unconstitutional” and therefore invalid. Action on Smoking and Health (ASH), a US-based anti-smoking group, criticised Philip Morris for “putting corporate profits ahead of health”. Balanga’s Bishop Ruperto Santos called the ruling “disgusting”.
The city is appealing but its resources are spread thin, in part because of another lawsuit that was launched by the PTI in May 2018, aimed at annulling the city’s Tobacco-Free Generation Ordinance. Garcia is staying upbeat. “We are fighting for what is right,” he says. But he is under no illusions. Since 2007, the tobacco industry has launched 12 lawsuits against proposed government oversight in the Philippines: it hasn’t lost a single one.
Since its beginning in a tobacconist shop in London in 1847, Philip Morris has grown into the world’s leading cigarette company, with a market capitalisation of $US124.3 billion ($178 billion). In 2018, the firm sold 781.7 billion cigarettes in more than 180 countries. Its brands include Virginia Slims, Chesterfield and the iconic Marlboro, the world’s bestselling cigarette, which, according to Forbes, commanded 43.3 per cent of the US market in 2017, bigger than the next 10 cigarette brands combined.
In late 2018, however, the company announced it had decided to stop selling cigarettes. In press releases sent around the world, it claimed it wanted to switch its customers “to smoke-free products entirely, so we can one day stop producing conventional cigarettes”. Why? “Because it’s the right thing to do.” The announcement had a certain traffic-stopping quality, and an almost heretical tone: “Smoking kills people,” it read. At once lofty and down to earth, the announcement seemed to signal an epochal shift, one driven by ethics, not money. In an open letter to the World Economic Forum, in Davos earlier this year, the company’s CEO, André Calantzopoulos, wrote that creating a “smoke-free future” was “a transformative vision, one that will change society”.
But the release was, of course, a marketing exercise, in this case for the company’s latest “reduced-harm” cigarette, called IQOS. IQOS is one of many next-generation products that have been developed by the major tobacco companies over the past decade. The most popular of these devices are “vape pens”, which heat a nicotine fluid, or “juice”, into a vapour that is then inhaled. (Selling a vape pen is legal in Australia, but selling the juice is not, meaning vapers have to source it from overseas.) IQOS, meanwhile, is what the industry terms a heat-not-burn product: it uses an electrical element, or “blade”, to heat a stick of tobacco just enough to release the nicotine as an aerosol. Philip Morris claims the device cuts users’ exposure to the carcinogens created when tobacco is burned, and that it could save the lives of millions of smokers. (Many experts are highly sceptical, noting, among other concerns, that IQOS hasn’t been around long enough for its health impacts to be properly assessed.)
What we are saying is that if for some reason you can’t quit, there is a safer alternative for you.
IQOS first launched in Italy and Japan, in 2014. According to the company, it is now being used by more than six million people in 45 countries; this month, it was made available for sale in the US. But it has not been approved in Australia, where authorities have taken a more cautious approach. “It’s frustrating,” says Tammy Chan, Philip Morris managing director for Australia, New Zealand and the Pacific. “Sometimes you hope that countries like Australia will be more receptive to what is happening around the world in technology, but we haven’t seen that yet.”
Chan, who was born in Hong Kong, is in her mid-50s, with shoulder-length hair and a broad, unlined face. A non-smoker, she has been with Philip Morris for more than 20 years, and has worked for the company in Asia and Europe, including at head office in Lausanne, Switzerland. For the past year she’s been based in Melbourne, where the company occupies three floors of a sleek new office block overlooking the Yarra. “IQOS is all about harm reduction,” she tells me. “There are three million smokers in Australia, and they are risking their lives. At the moment, you either have to quit cigarettes or you die. There is no in-between. What we are saying is that if for some reason you can’t quit, there is a safer alternative for you.”
According to Chan, Philip Morris has spent $US4.5 billion developing IQOS. In 2017, the company also set up the Foundation for a Smoke-Free World, a research and funding organisation whose stated goal is “eliminating smoking worldwide as soon as possible”. The company will fund the foundation to the tune of $US80 million annually for the next 12 years, but insists that it will be independent, saying it has “extremely rigid protections” against any involvement from Philip Morris or anyone else in the tobacco industry. (The World Health Organisation has rejected this claim, and says it will not engage with the foundation. Australian health bodies have done likewise.)
Chan insists the company wants to be “part of the solution”. There are a billion smokers worldwide, mostly in developing countries; seven million of whom die each year. “We have a lot of knowledge to contribute,” she tells me. “Our intentions are good, and we are totally transparent. We know the scepticism. But we are asking people to believe that we have changed.”
Most health experts find this laughable. “This is the same old industry,” says Mike Daube, a veteran anti-smoking campaigner and former director general of the Western Australia Health Department. “In the past decade, all the things we did – tax increases, health warnings, smoking bans – really put the industry on the back foot. But globally, these companies don’t go to sleep, they strategise.
“The industry is resurgent now,” Daube continues. “The only difference is they are more sophisticated.”
Philip Morris is selling IQOS as a revolution, but there is, in fact, nothing new about it. “Reduced harm” cigarettes have been around for decades. As far back as the 1920s, Lucky Strike advertised itself as “less irritating to the throat”. When scientists conclusively proved the link between smoking and lung cancer, in the early 1950s, manufacturers began introducing filter tips, which they claimed cut the amount of tar reaching the lungs. Then, in the late 1960s, the industry introduced “lights” and “milds”.
“All these developments were designed to keep people smoking by giving them the impression that it was safer,” says Daube. As has subsequently become clear, none of these low-risk “innovations” worked, and the tobacco companies knew it. In 2006, a US Federal Court judge found that the cigarette companies had for decades falsely marketed “lights” and “milds” as less harmful than regular cigarettes, and ordered them to make corrective statements in newspapers and TV stations throughout the US. (The industry fought for 11 years to water down the wording of the statements, which finally aired in 2017, and included warnings that there is “no safe cigarette”, and that “more people die every year from smoking than from murder, AIDS, suicide, drugs, car crashes, and alcohol, combined”.)
In Australia, the catchwords “lights” and “milds” were outlawed in 2005, after the Australian Competition and Consumer Commission deemed them to be misleading and deceptive. Still, Australia never saw corrective statements like those in the US. When I ask Chan why, she tells me that “it’s a very different jurisdiction here,” adding: “I prefer to look forwards than look back.”
Like other “reduced-harm” products, IQOS promises to lure new smokers to the market. Philip Morris internal corporate affairs documents from 2014, leaked to Reuters in 2017, revealed that the company sees these new products “as a pathway for future growth” and “an opportunity to normalise [our] corporate reputation”. The documents also showed that it was time for the company “to be for something”, and to use emotive, more “human” language to rehabilitate its image. Reputation-laundering is a corporate staple, of course, but it’s especially important to the tobacco industry, which has, since the WHO’s 2005 Framework Convention on Tobacco Control (FCTC), been expressly shut out from engaging with governments, especially with regard to health policy. “Presenting itself as reputable is one way to get a foot in the door with officials,” says Daube.
It is also a way to get your foot in the door with big business. This year, for the first time, Philip Morris attended the World Economic Forum, in Davos, where the agglomeration of private wealth and political power afforded the company the perfect opportunity, as Philip Morris chief spokesperson Marian Salzman later wrote on the company’s website, to “rejoin civilised society”. The business media happily obliged: The Wall Street Journal hosted an event with the company on “communications in the era of disruption”; Politico, the US political journalism website, produced its Davos Playbook, a daily newsletter that was sponsored by Philip Morris, and which featured a link to CEO André Calantzopoulos’s “open letter”.
In an article in Forbes in February, Salzman compared the company’s transformation to glasnost, “that period of openness and transparency, in the dying days of Communist Russia, when it slowly started coming out of its hiding place to engage with the world”. It was a process, she added, for which the company deserved to be “heavily awarded”.
In my conversation with Chan, she repeatedly urges me to look at the science on e-cigarettes, much of which is presented on Philip Morris’s website. “We do a lot of the research ourselves, in our own laboratories,” she says. “The research clearly shows that if you burn something, there is this smoke. But when you use an e-cigarette or one of our products, you produce an aerosol. It’s made purely of water droplets.” (In 2016, the US Surgeon General concluded that “e-cigarette aerosol is not harmless ‘water vapour’. “)
Big Tobacco has long attempted to manipulate the science around cigarettes, most notably in the 1990s, when it tried to discredit research by the US Environmental Protection Agency (EPA) into the dangers of second-hand smoke as “junk science”. More recently, the industry has been shown to sow disinformation and doubt in much the same way as the fossil-fuel lobby has fostered climate science denial.
In any case, it’s hard to know what to make of the science, mainly because there is so much of it. The past 15 years have seen no less than 4490 research papers published on e-cigarettes and heat-not-burn products. Some of these papers were commissioned by governments, some by independent organisations and others by the industry. Taken as a whole, they are of such hair-pulling complexity as to confound even the most diligent policy-maker, which may partly explain why some countries, like Britain, have fully legalised e-cigarettes while others, such as Brazil, have banned them outright.
Still, some recent studies point to the health benefits associated with smokers switching to e-cigarettes. In 2018, Public Health England suggested that vaping posed only a small fraction of the risk associated with smoking. In January 2019, The New England Journal of Medicine published the results of a year-long, randomised trial which showed that e-cigarettes were almost twice as successful as products like patches or gum in getting smokers to quit. “Vaping is a far safer alternative to smoking, and it has the potential to save the lives of hundreds of thousands of Australians who are unable or unwilling to stop smoking,” says Colin Mendelsohn, from the School of Public Health and Community Medicine at the University of NSW. “Australia is the only Western democracy to ban vaping, despite the evidence that it would be a huge benefit to public health.”
In 2017, Mendelsohn set up the Australian Tobacco Harm Reduction Association (ATHRA), a Sydney-based charity that has spearheaded the campaign to legalise vaping and heat-not-burn products in Australia. Mendelsohn writes about e-cigarettes and gives interviews; he also travels to “harm reduction” conferences worldwide. But he has been criticised for links to the tobacco and vaping industries, and has taken some $43,000 in vaping and tobacco industry-related funding. (He says ATHRA stopped accepting vaping money in March.) Mendelsohn denies that vaping is a “gateway drug” propagated by Big Tobacco to encourage young people to use nicotine. But this is not supported by the evidence. Juul, an e-cigarette that came on to the US market in 2016, has become phenomenally popular with adolescents; according to a national study, Juul, which comes in a variety of flavours, including mango, vanilla and cucumber, helped drive up US teen vaping rates by 91 per cent between 2017 and 2018.
Vaping is leading youth into … nicotine addiction, not away from it.
“Vaping is leading youth into … nicotine addiction, not away from it,” said University of Michigan researcher Richard Miech. In September last year, the then US Food and Drug Administration commissioner, Scott Gottlieb, blamed Juul for what he called “an epidemic” of vaping among American high school students. Three months later, Altria, the parent company of Philip Morris USA, bought a 35 per cent stake in Juul, for $US12.8 billion.
“Vaping is a weapon of mass distraction,” says longtime Australian anti-tobacco activist Simon Chapman. “Big Tobacco sees vaping as a way to grow the market, but at the same time it gives them air cover to say, ‘We’re the good guys now,’ thus helping people to forget that they are doing all they can to promote smoking by opposing effective tobacco-control policies like tax, plain packs, graphic health warnings, and smoke-free policies, particularly in poorer countries.”
The developing world is, indeed, the Wild West for Big Tobacco. In fast-growing markets like Asia, minimal health awareness and lax regulation allow cigarette companies to operate with near impunity. When, in 2017, the government in Sri Lanka proposed restricting the sale of cigarettes within 100 metres of schools, the Tobacco Retailers’ Association met with the finance minister and had the measure scrapped. When the Indian government attempted to introduce more prominent health warnings on cigarette packets, in 2015, tobacco companies filed 27 legal challenges in various jurisdictions throughout the country, delaying implementation by three years. Internal Philip Morris documents uncovered by Reuters show how, in 2017, Philip Morris and British American Tobacco bullied Pakistan’s then prime minister, Shahid Khaqan Abbasi, into blocking larger health warnings on cigarette packets.
Indonesia is particularly vulnerable. There, 67 per cent of adult men smoke, and children start as young as seven. It is also the only country in the world that still allows direct cigarette advertising, providing a dream canvas for Big Tobacco copywriters. “Rice has become expensive. Your business has failed. Just play,” Sampoerna, Indonesia’s third largest cigarette maker, told smokers. PT Djarum, meanwhile, advertised its L.A. Lights by telling customers: “DON’T QUIT!”
Philip Morris entered the market when it bought Sampoerna in 2005, whereupon it launched its own, idiosyncratic marketing campaign, including a billboard with the slogan “Dying is better than leaving a friend. Sampoerna is a cool friend!”
In 2016, the same year that Philip Morris began a soft launch of its smoke-free message, Paul Janelle, then Sampoerna boss, was enthusiastically spruiking one of the company’s new, stronger cigarettes called UBold, an economy brand aimed at low-income earners. Selling “full flavour” cigarettes in Indonesia was by no means easy, Janelle told a local journalist, but he remained optimistic. “We’ve made some very good inroads. The initial signs are that things are looking better in 2016.”
Before I meet Dr Mary Assunta, one of the world’s foremost tobacco control experts, I imagine a hard-charging, Erin Brockovich-type figure.In fact, Assunta is uncommonly courteous, a timid, bird-like woman with a voice so soft that, sitting in her Sydney office, I have to lean in close to hear. The closest Assunta gets to a show of intemperance is when, sitting across the table from me, hands cupped in her lap, she describes the industry’s claims of harm reduction as “absolutely repulsive”.
Assunta has been working on tobacco control for 30 years, and is the director of Cancer Council Australia’s International Tobacco Control Project. She is also a senior policy adviser with the Southeast Asia Tobacco Control Alliance (SEATCA), an anti-smoking group based in Thailand. By providing legal expertise and advocacy training, SEATCA helps government officials develop tobacco control policies. It has had some significant wins, especially on tax increases, which have been shown to be one of the most effective ways to reduce tobacco demand. This has made her, and SEATCA, something of a target. Internal Philip Morris documents describe SEATCA as “the major ATO [anti-tobacco organisation] in Asia”, which it aims to neutralise by “building ASEAN-wide counterweights”. The documents also discuss a “global project team” that had been established to “begin tracking … all local ATOs,” and “report unusual behaviour”. To help identify key anti-smoking figures, the documents included a page of photos, including of Assunta, Simon Chapman, and Dr Margaret Chan, the then director-general of WHO.
“The industry is always gathering intelligence,” Assunta tells me. “One of the things they do a lot is use ‘benign agents’, like ‘independent’ journalists, who ask to interview me, to find out what our strategies are.” Cigarette companies are also known to send bogus reporters to anti-tobacco conferences to spy on or frustrate proceedings; at the latest meeting of the WHO’s Framework Convention on Tobacco Control, in Geneva, in 2018, a member of the Consumer Choice Centre, a known tobacco industry lobby group, was caught wandering about, claiming to be a reporter, and was promptly ejected.
Assunta doesn’t seem especially bothered by this kind of chicanery, in part because she uses similar tactics against the industry. Together with other SEATCA members, she produces regular tobacco industry surveillance reports, which detail the extent to which cigarette companies attempt to subvert tobacco control throughout Asia. The reports, which are exhaustively researched, read like a field guide to third-party lobbying and the use of front groups, a catalogue of the industry’s relentless efforts to pressure governments and infiltrate community groups.
One of the most popular tactics is to hijack the idea of corporate social responsibility (CSR). “We see it more and more,” says Assunta, “especially in countries that have banned cigarette advertising and promotions. CSR is a loophole for tobacco companies to promote their corporate image and remain in the public eye, and also to get them access to senior government officials.”
The beauty of CSR, especially in the developing world, is that there is a constant need for it. There is always a bridge to rebuild, a disaster to relieve or a program to fund. In 2017, Philip Morris sponsored a back-to-school initiative in Malaysia, where 1200 kids from poor families were given free bags and shoes. In Laos, Imperial Tobacco handed out complimentary crops to 2000 tobacco farmers. Almost all cigarette companies invest in youth anti-smoking campaigns, which are known for emphasising measures that don’t work (proof of age for purchase), while downplaying measures that do (such as price increases). Co-opting the media is another popular tactic: Philip Morris funds media workshops throughout Africa where journalists are advised on how to cover the debate around reduced-harm products. In the Philippines, meanwhile, the company has, since 2007, sponsored the annual Bright Leaf awards, honouring excellence in agriculture journalism. One of last year’s winners was a newspaper piece titled, “Is Tobacco the Next Miracle Crop?”
Philip Morris has always insisted that its CSR work is charity, and that is it unrelated to its commercial interests. It is about “giving back, wherever we are”, as the company website puts it. And yet the two ASEAN countries where Philip Morris spends the most on CSR – Indonesia and the Philippines – are the two ASEAN countries that, according to market researchers, Euromonitor, show the greatest potential for growth in cigarette sales.
Some will argue that the tobacco industry cannot be trusted, and thus the primary goal should be its extermination.
Regardless of whether you see them as a breakthrough for public health or just another revenue stream for Big Tobacco, products like IQOS have already been successful in regard to at least one of the industry’s longest held goals: to divide its opponents. “Harm reduction has been the industry’s lever to create division in the anti-tobacco movement, and it’s worked,” says Lisa Bero, a public health expert and tobacco researcher at the University of Sydney. “There are now two camps: people who think that we should focus on prevention rather than harm reduction, and that harm reduction is diverting resources. Then other people who think that no matter what you do, there will be people who can’t quit and they need help and these reduced-harm products are a good idea.”
Last year, six high-profile international researchers issued an exculpatory open letter in the Society for the Study of Addiction journal, defending their decision to work with the tobacco industry on reduced-harm research. “Some will argue that the tobacco industry cannot be trusted, and thus the primary goal should be its extermination,” they wrote. “[But] given that seven million smokers die each year due to the use of combustible tobacco products … all approaches should be considered … regardless of who makes a profit from [them].”
The debate is getting ugly: in the UK, academics and public health experts who raise concerns about e-cigarettes have been subjected to coordinated online abuse. According to the UK Telegraph, professors have been sent pictures of nooses; Robin Ireland, former head of the UK health policy alliance, Health Equalities Group, was sent a tweet reading: “You deserve a bullet.”
Australian academics are not immune. Simon Chapman is regularly trolled by pro-vapers on Twitter, where he has been variously likened to a mass murderer, a paedophile, a herpes infection, “a floating turd that just won’t be flushed”, a retard, an irrelevant pensioner, and Anders Breivik, the gunman who shot 77 people in Norway in 2011. Fellow anti-tobacco veteran Mike Daube has withdrawn from Twitter altogether, but still gets unpleasant emails: “It’s vicious. Just unutterably nasty.”
Beyond the bile and mutual distrust lies the future of the tobacco industry, and the millions of people affected by it, including smokers, public health authorities and market players. (Tobacco has always been obscenely profitable: according to Credit Suisse, a dollar invested in tobacco stocks in 1900 was worth $US6.28 million in 2010.) Philip Morris hasn’t put a deadline on its “smoke-free future”, prompting many to question its commitment. When I ask Tammy Chan why Philip Morris doesn’t stop selling cigarettes immediately, she says that “it’s a long-term journey,” adding that “if we are absent in certain places, it makes it even harder to inform the smokers that there are better alternatives.”
Australia has led the world in tobacco control measures, starting with initial advertising bans in 1976, progressive tax increases and 2012’s plain packaging laws. Today the country is known, in tobacco industry parlance, as a “dark market”, meaning that there is little cigarette companies can do here to promote their product or communicate directly with consumers. Such restrictions are forcing the sector to get more creative. BAT has sponsored industry events and parties in Sydney featuring free alcohol, food and cigarettes, which then receive generous coverage on social media. In March, in the lead-up to the Australian Grand Prix in Melbourne, Philip Morris was accused of subliminal advertising with its sponsorship of Ferrari’s F1 team, replacing its Marlboro logo with a similar red and white chevron. (The company was forced to drop the design following an investigation by Australia’s federal Department of Health.)
Anyone working for these companies has come in knowing with absolute certainty that they work for an industry that kills people.
Chan’s role in Australia is similarly circumscribed. The consensus seems to be that reduced-harm products like IQOS won’t be legalised in Australia any time soon, with the Therapeutic Goods Administration, Australia’s Chief Medical Officer, the Australian Medical Association and National Health and Medical Research Council opposed to their introduction. In the meantime, Chan liaises with retailers, and spruiks the industry before government inquiries, such as a Western Australia parliamentary select committee that met in February to discuss the impact of e-cigarette regulation on “personal choice”. She also writes letters to doctors and health organisations, such as the Cancer Council Australia, asking for a “dialogue” regarding Philip Morris’s smoke-free vision. So far, no one has taken up the offer. (“A number of our colleagues have received letters from Philip Morris and we’re all ignoring them with the contempt they deserve,” Cancer Council Australia CEO Sanchia Aranda says.)
One thing is certain: the industry is famously resilient and well-resourced. It has an addictive product, and many untapped markets, mostly in the developing world, and mainly with women. Some tobacco companies – including Altria – are also investing heavily in the legal marijuana market.
Chan insists that the industry has changed, and that it deserves another chance. Many others say Big Tobacco is, if anything, more malevolent than ever. “There is a much more ruthless breed of people through the industry than before,” says Mike Daube. “I’ve been working on tobacco control since the 1970s. Back then, you could understand that people at the top of the industry took bad decisions in working for these companies; they had started before all the evidence came through. Now, anyone working for these companies has come in knowing with absolute certainty that they work for an industry that kills people.
“Big Tobacco isn’t going anywhere,” he says. “But then, neither are we.”