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Archive for May, 2014

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Health specialists point up vital role of new products in harm reduction

| May 30, 2014

Fifty-three specialists in nicotine science and public health policy have written to the World Health Organization expressing their concern that the strategy of tobacco harm reduction seems to have been overlooked or even marginalized in the run-up to the next meeting of the Conference of the Parties (COP) to WHO’s Framework Convention on Tobacco Control (FCTC).

The specialists are believed to have been alerted to the problem by the contents of a leaked document from an FCTC preparatory meeting ahead of the COP6 meeting in Moscow in October.

In a letter dated May 26 and addressed to the WHO’s director general, Dr. Margaret Chan, the specialists said that because of the toll of death, disease and misery attributed to tobacco by the WHO (up to one billion preventable tobacco-related premature deaths this century), it was necessary to be relentless in the search for all possible, practical, ethical and lawful ways to reduce this burden.

“We have known for years that people ‘smoke for the nicotine, but die from the smoke’: the vast majority of the death and disease attributable to tobacco arises from inhalation of tar particles and toxic gases drawn into the lungs,” said the specialists in their letter that was copied to the FCTC Secretariat, Parties to the FCTC and WHO regional offices.

“There are now rapid developments in nicotine-based products that can effectively substitute for cigarettes but with very low risks. These include for example, e-cigarettes and other vapour products, low nitrosamine smokeless tobacco such as snus, and other low-risk, noncombustible nicotine or tobacco products that may become viable alternatives to smoking in the future.

“Taken together, these tobacco harm reduction products could play a significant role in meeting the 2025 UN noncommunicable disease (NCD) objectives by driving down smoking prevalence and cigarette consumption. Indeed, it is hard to imagine major reductions in tobacco-related NCDs without the contribution of tobacco harm reduction.

“Even though most of us would prefer people to quit smoking and using nicotine altogether, experience suggests that many smokers cannot or choose not to give up nicotine and will continue to smoke if there is no safer alternative available to them.”

The specialists went on to suggest 10 principles that should underpin the public health approach to tobacco harm reduction, with global leadership from the WHO.

New RAI website to raise awareness of U.S. black market in cigarettes

| May 30, 2014

A new website has been launched with the aim of raising awareness of the black market cigarette trade in the U.S.

Sponsored by RAI Services Co., a subsidiary of Reynolds American Inc., the new website aims also to encourage states to pass stiffer penalties for smuggling and devote more resources to enforcement.

“Cigarette smuggling costs states an estimated $5.5 billion annually,” said a note posted on RAI’s website announcing the new website.

The new website, www.thenewtobaccoroad.com, is said to show how Interstate 95 has become a key transit route for cigarette smuggling from southern states to the Northeast. “The illegal profits that are being derived from these operations benefit an organized-crime infrastructure already experienced in transporting illegal drugs and other contraband, and fostering violent crime up and down the I-95 corridor,” said the RAI note.

The website aims to provide “important information of interest to lawmakers, law enforcement officials and concerned citizens on how serious the problem of cigarette smuggling really is, and what federal and state governments can do about it.”

It features access to recent studies and news reports on the prevalence and cost of cigarette smuggling for the major states along I-95.

Gamucci is ‘Best Electronic Cigarette’

| May 30, 2014

Gamucci was crowned the U.K.’s “Best Electronic Cigarette” brand at the recent Consumer Choice Awards 2014, organized by Brand Weekly.

The innovative awards are based on the views of consumers who nominate and vote for products and services.

This new approach to awards reflects the growth of social media and other online platforms that have caused consumers increasingly to look to other consumers for recommendations on the best products and services on the market.

The e-cigarette award was one of the awards that generated most consumer votes, alongside those for Best High Street Retailer and Best Consumer Mobile App.

Gamucci was launched on the U.K. market in 2007 and is now sold in 55 countries.

“From inception, Gamucci invested heavily in R&D to develop the world’s first disposable electronic cigarette and integrated cartomizer technology, for which it has been granted a U.K. patent and has a U.S. patent pending,” the company said in announcing its award. “In the U.K., its products are available at Tesco, Waitrose, WHSmith and a number of other leading retailers.”

Meanwhile, in a joint statement, Taz and Umer Sheikh, co-founders of Gamucci, said it meant a great deal that consumers had voted for Gamucci as their e-cigarette of choice.

“This shows that product quality is becoming increasingly important as the market continues to develop.

“In a category where brand loyalty and intimacy is still lacking and the market place is very crowded, this is a massive vote of confidence for Gamucci ‘the brand.’

“A lot of expertise lies behind the product, and our customers recognize that they will get the same consistent and enjoyable experience each and every time.”

JTI announces shareholder meeting

| May 30, 2014

Japan Tobacco Inc. is due to hold its ordinary general meeting of shareholders starting at 10 a.m. on June 24 at the Tokyo Prince Hotel.

The next generation

| May 29, 2014

Hauni’s new filter maker prepares cigarette manufacturers for the demands of tomorrow.

TR Staff Report

Hauni Maschinenbau has launched a new generation of basic filter makers, the KDF 5, featuring future-oriented functions and “intelligent flexibility.”

“With the KDF 5, we have developed a maker for acetate filter production that offers unprecedented performance even in its basic version,” says Klaus Masuch, Hauni’s group manager, product consulting.

Since discontinuing its KDF 2E a few years ago, Hauni has been serving the 500 meter-per-minute segment with rebuild machinery. “The KDF 5 now allows us to offer a future-proof machine with a highly attractive price-performance ratio, which can be adapted flexibly to the specific manufacturing needs of the customer,” says Masuch. “The wide range of optional extras available means it is already well-prepared to meet the future challenges associated with a rapidly expanding number of filter types.”

During the development phase, Hauni drew heavily on the innovations and know-how it has accumulated over 40 years of working on filter makers (see sidebar) as well as the extensive input of technicians, customers and trainers. These insights and technologies are reflected in new technical features that, when combined with components already used successfully in other machines, ensure the KDF 5 achieves new levels of performance, efficiency and operating comfort.

Filters of the future

The many adjustments Hauni made during the development phase to optimize its new product include the first-ever use of a directly driven knife carrier, easily adjustable glue guns and improved accessibility through a new, wide-opening door design.

“Above all, it is the many incremental improvements that have made the KDF 5 a standard machine capable of rising to the ever-greater challenges of future filter production,” says Arne Klisch, product consultant, engineering, at Hauni.

“Starting with the principle that less is more, we decided to focus on the core functions and make the machine design as operator-friendly as possible.” Thus far, the reaction from Hauni’s customers has been positive. A recent test, conducted at Japan Tobacco International’s (JTI) factory in Trier, Germany, suggests that Hauni has done its homework. The Trier factory field-tested the KDF 5 from September to November 2012. For JTI, flexibility was one of the key investment considerations. Changing the filter length in the basic version of the KDF 5 takes just 70 minutes, including the subsequent production approval. By comparison, this format change takes 120 minutes using the standard version of the KDF 4. “The whole production line can be converted in record time when combined with the corresponding Hauni tray logistics,” reports Klisch.

Flexport: one platform for every solution

Today, economically optimized filter production offers more than high machine availability and consistent quality in the manufactured products. “Naturally, the KDF 5 from Hauni meets these requirements just as effectively as all the machines we have brought to market over recent decades,” says Masuch. “But filter production is in a state of change. More and more variants are already required to satisfy the need for product differentiation, which in turn demands new manufacturing technologies.”

To ensure that its customers have a platform for this and all future solutions, Hauni’s development team has spent the past few years developing the Flexport concept. The name says it all: The machine concept consists of a basic and a functional module and aims to achieve the maximum degree of flexibility—particularly in relation to the special filters of the future. The basic module is placed between the tow processor and the rod maker, and the various functional modules are then integrated into this base module. Integrable modules are, for example, granule application, thread application or channel ventilation modules. The available interfaces have a universal design that offers scope for integrating existing and future developments.

At the same time, Flexport optimizes the convertibility of filter makers by permitting quick function changes. Gunnar Tons, head of product management, filters, at Hauni, has a clear answer when asked about the future direction of customer requirements in filter production: “They are looking for flexible solutions for use in the filter-rod manufacturing process. Flexport is our response to this challenge.”

The concept of an open portal, which has been realized through the development of Flexport, also reduces the time to market for new products. “During the development process, we focused very clearly on increasing the flexibility of the means of production,” explains Klaus Masuch. The time required for changes between a special and a mono filter specification has been cut dramatically compared to standard processes.

First modules in the starting blocks

The first functional modules for Flexport will be in operation in customer production lines this year. The Flexport modules enable the customer to give the cigarette a unique design and thus support brand identity. According to Klisch, the three modules completed so far are just the beginning. “With Flexport, we have created an open portal that offers many possibilities for the future. It reduces the time required for format changes while the machine is operating as well as the total investment costs compared to previous individual solutions. We will continue to consult closely with our customers in order to extend and tailor our range of modules to their needs.”

Sidebar 1
Hauni and filter manufacturing—a rich history

Hauni has a long tradition in the design, production and supply of filter-manufacturing equipment. Approximately 75 percent of all the filters used in cigarettes around the world are now manufactured using machines from Hauni. Below are some of the highlights.

1967: Hauni presents its first filter making line: the AF-KDF.

1974: Hauni develops the AC, a charcoal feeder for filters.

1975: Hauni presents its first multifilter maker.

1980s–1990s: Hauni continues to develop its machines, increasing production speed to a maximum of 600 m/min.

1990: Hauni offers the CU20, a machine for the production of crepe filters, through its subsidiary Decouflé.

2003: Hauni launches its Merlin multifilter maker, which can produce filters with between two and four segments plus recess.

2009: Market launch of the KDF-M double track filter rod production line with a speed of 1,000 m/min.

Sidebar 2

Basic model KDF 5: the functions at a glance

  • Extended-length format
  • Low format height
  • Glue-gun spraying (optional)
  • Above-garniture gluing/seam glue
  • Quick length change
  • Extended tow characteristic curve through U-style tow opener
  • Oil-free
  • <77 dB(A) noise emission
  • Thermoelectric sealer section chilling
  • Single cooling circle
  • ODM (optional)

 

Counterproductive

| May 29, 2014

Anti-tobacco activists campaigning against tobacco companies’ social responsibility initiatives in India may do more harm than good.

By George Gay

For people such as I, who live in the U.K., where you vote in a general election on one day and wake up the next morning to hear the result, India’s election process gives pause for thought. Look at it this way: Whereas I am beginning this story just after the start of India’s national elections, you will possibly be reading it before they are through. It apparently takes more than six weeks to complete the process.

And little wonder: More than 800 million eligible voters have to cast their ballots at about 930,000 polling stations before it’s all over. So while in the U.K. you will often find yourself outnumbered at the polling station by officials and exit pollsters, in India, you are more than likely to be standing in a long queue.

And whereas election campaigns in the U.K. are mostly calm, almost staid at times, in India they can be boisterous—to the point where, this year, the election commission chief was quoted in The Guardian as saying his biggest anxiety was ensuring six weeks of rolling elections passed off with no disasters, “man-made or natural.”

The dynamic democracy that India has is a huge source of pride, and it is often used as a reason for explaining away aspects of what goes on in the country that outsiders find difficult to fathom. One example of this from the tobacco industry concerns the fact that flue-cured production, though officially the subject of Tobacco Board of India targets, is usually boosted by over-target leaf that is sold officially through the board’s auction system, albeit these days, subject to some sort of penalty. In the past, when I questioned why this happened, I was told that it was not possible to stop people from growing flue-cured because India was a democracy.

Some might see such a situation as more anarchy than democracy, but I have to say I admire the Indian way. A good helping of flexibility and its poor cousin, muddling through, must be needed in such a huge, populous and diverse society.

Excluding the industry

Of course, in such a society, there will always be times when the individual will feel frustrated by democracy, as anybody who has driven on some of the country’s motorways will appreciate. And I would imagine that, right now, some tobacco people will be ruing the day that public interest litigation (PIL) was introduced to India some 35 years ago. PILs, on the surface at least, are democracy squared. They provide a way for individuals and organizations that might not otherwise have the resources to air in court issues that they believe the government has failed to address in the interests of the public.

And so it is that, as I write this piece, a PIL is being heard that seeks to have tobacco manufacturers excluded from corporate social responsibility (CSR) initiatives. According to a story in The Times of India, this PIL, which was foreshadowed some time ago, was filed by S. Cyril Alexander, the state convenor of the Tamil Nadu People’s Forum for Tobacco Control. In it, he points out that, since April 1, companies in India have been required to spend 5 percent of their after-tax profit on various welfare, development and relief activities. And in return, the companies are allowed to use their brand names and company logos as part of these activities in order to create brand recognition and goodwill.

While welcoming in general the requirement that companies take part in CSR activities, the PIL adds that allowing the tobacco industry to be included would result in the promotion of its brands and thereby run counter to the purpose of the scheme because government expenditure on health, the environment and social welfare would be increased.

In the case of the tobacco industry, the PIL says, companies should instead pay the 5 percent levy to state and central governments for meeting the medical costs of people affected by tobacco products, and for furthering the National Tobacco Control Programme (NTCP) initiatives.

I am not sure how such a PIL, if accepted by the courts, would play out. I would have thought that current tobacco control legislation would have prevented tobacco companies from promoting tobacco brands anyway, though I would concede that some—but by no means all—corporate branding might prove to be more of a problem.

And I wonder which companies might be affected by such legislation, given that the PIL apparently talks about the tobacco industry. Would filter and tobacco-product packaging material companies, for instance, be excluded from the CSR scheme?

Delinked

And the big question is, perhaps, would ITC be excluded? Although the company is now highly diversified, and while its name no longer mentions tobacco, nor, I suppose, implies a tobacco connection (the 1910-incorporated Imperial Tobacco Co. of India became, in 1970, India Tobacco Co., then, in 1974, I.T.C., and, finally, in 2001, ITC), it is the biggest cigarette manufacturer in the country by a long way.

Not that some of India’s younger generations—a big slab of the country’s population—would necessarily link ITC with tobacco. The company has gone some way—whether by design or not—to expunge tobacco from its image, though not from its revenue and profits. If you take a look at its brands booklet, you could be forgiven for thinking that the company doesn’t make cigarettes. The booklet doesn’t mention tobacco or cigarettes, nor are there any images of tobacco products. In fact, the only tobacco vestiges are the brand names appropriated from cigarettes to boost the company’s apparel and personal care businesses.

Meanwhile, in March, a press note appeared on ITC’s website that said the company had been voted among the top two “Buzziest Brands in the Corporate category by ‘afaqs’, one of the world’s largest marketing and advertising portals.” And it took the opportunity of the Annual Buzziest Brands Awards to talk about its corporate brand and its consumer brands. “ITC is one of India’s most trusted and valuable corporates,” it stated. “Its world-class brands delight millions of Indian households. With quality and trust as its trademarks, ITC’s FMCG portfolio consists of over 50 vibrant brands. ITC’s brands like Aashirvaad, Sunfeast, Dark Fantasy, Delishus, Bingo!, Yippee!, Candyman, Mint-o and Kitchens of India in the Branded Foods space, Fiama Di Wills, Vivel and Engage in Personal Care, Classmate and Paperkraft in Education & Stationery; Wills Lifestyle and John Players in apparel, Mangaldeep in Agarbattis and Aim in Matches are popular across the country.”

Again, not a word about tobacco products, though they come under the FMCG portfolio. And if you look at the press release issued by ITC on Jan. 17, in respect of its financial results for the three months to Dec. 31, 2013, again it would be easy to miss the fact that ITC makes cigarettes. Cigarettes rate only one mention, and that has to do with the fact that taxes/duties on them were increased. It is only when you click on the bottom of the release and go to the figures that you see, in the final table, that cigarettes are the mainstay of the company.

Of course, while some of the younger members of the general public might be surprised to find out that ITC is a tobacco company, the fact that its diversifications have been built on tobacco wealth is not going to get by the Tamil Nadu People’s Forum for Tobacco Control.

Good business sense

So does this mean that ITC would be made to give up its CSR programs if the PIL were successful? I would hope not. A lot of the extensive CSR activities that ITC is involved in simply make good business sense in the environment in which the company operates, and they make good environmental sense, as has been recognized by organizations better placed than I am to judge such matters.

In March of last year, ITC stated in a press note that it was ranked No. 1 for the second consecutive year in the CSR category of the Nielsen Corporate Image Monitor 2012–2013.

ITC’s top position in the category Most Active in CSR was “an acknowledgement of the scale and impact of its sustainability initiatives which had created large scale livelihoods and augmented natural resources,” the company said. ITC’s businesses had created sustainable livelihoods for 5 million people, many of whom belonged to the poorest sections of society. The company’s performance on augmenting scarce natural resources, as well as combating climate change, had been globally recognized. ITC was the only company in the world to have been carbon positive for seven years in a row, water positive for 10 years consecutively and solid-waste recycling positive for five years consecutively. All of its luxury hotels were LEED Platinum Certified by the U.S. Green Building Council. Renewable energy constituted nearly 40 percent of its total energy consumption.

As part of its 360 degree interventions in rural agricultural communities, ITC had constantly endeavored to strengthen and diversify livelihood options through both farm and off-farm activities. Its e-Choupal, the world’s largest rural digital infrastructure, had empowered more than 4 million farmers. And its integrated Watershed Development Programme had provided soil and moisture conservation to farmers in water-stressed areas and helped promote sustainable agriculture, apart from contributing to the company’s water-positive status. This program covered more than 100,000 ha of water-stressed areas in rural India.

Meanwhile, ITC’s Social and Farm Forestry Programme, which helped rural wasteland owners convert their land into pulpwood plantations, had greened more than 140,000 ha while creating livelihood opportunities for poor tribal members and marginal farmers. The plantations had also sequestered more than 4,380 tons of carbon dioxide and played a major role in maintaining ITC’s carbon-positive status during the past seven years.

ITC said its business linked sustainability initiatives together with its social investment programs and had had a transformational impact on rural India. Its Livestock Development Programme had provided animal husbandry services to over 800,000 milch animals, thereby providing additional income avenues for farmers. And its Women’s Empowerment Programme had created sustainable livelihoods for more than 40,000 rural women, while its Primary Education Programme had benefited more than 300,000 children.

Winners and losers

That is quite a record, and you have to ask yourself who, given that ITC apparently goes to some length to apply a light touch to its tobacco brands, would benefit from a requirement that it could no longer involve itself in CSR projects. Or perhaps that question should be asked in a slightly different way. Given the morality test often used: How many people would benefit from taking such action against ITC and how many would lose? I don’t know—and nobody else knows—how many would benefit, because to benefit somebody who would have been drawn to tobacco use if ITC had been allowed to continue its CSR programs using its ITC logo would have had to have remained tobacco free because those programs were curtailed—a difficult number even to guess at.

The number of people who might lose is easier to quantify roughly. Some of them are hinted at above, though, clearly, even if ITC were no longer able to carry out CSR activities, at least some of its programs would continue, though not under a CSR banner.

And, as I wrote in 2010, the number of people who require the sort of leg up that ITC provides is huge. India is creating an additional 20 million people each year, so, just to stand still it needs to create more, lots more, of everything. “Feeding this growth is a major issue, but the biggest question of all is how can such growth be achieved and maintained in a sustainable way—a question to which ITC has been applying its creative resources for some years,” I wrote four years ago.

“This is a bold and, at times, frustrating mission to pursue. Bold, because ITC is a group that is not interested simply in changing over to low-energy light bulbs, commendable as such an effort would be; this is a group dedicated to what it terms the Triple Bottom Line philosophy of social, economic and environmental well-being—one of the only groups in the world, if not the only group, to be water positive, carbon positive and 100 percent solid-waste-recycling positive.

“But it must be frustrating at times because the size of the company and some of its 13 businesses tend to attract negative publicity in respect of social and environmental issues—the very areas where they excel. Take the group as a whole: It is still headlined by its tobacco division and therefore still burdened with all of the negative publicity that that entails.”

As the last sentence from 2010 indicates, opposition is nothing new. It blows hot and cold and, for all I know, the PIL might prove to have been a storm in a teacup. But the PIL does provide, I think, a good example of the dangers of unintended consequences.