BAT calls for collaboration to accelerate tobacco harm reduction

In his keynote speech at the Global Tobacco and Nicotine forum, Kingsley said: “We must provide adult consumers with a portfolio of products that are a better choice than cigarettes. And, so that consumers are able to make informed decisions about those choices, public health needs to accurately communicate risk, while the industry should be able to responsibly communicate the benefits of switching via appropriate marketing freedoms.”

 

Read Kingsley’s speech in full below.

 

Ladies and gentlemen,

 

It is always a pleasure to address the audience here at the GTNF. Doing so at this critical juncture for our industry is a real privilege.

 

However, some of you may find what I cover today familiar. In some respects, I could have given this address five years ago. And yet, year after year the core thrust of what I have to say remains consistent. Why? Because I believe we can and must change.

 

If we don’t, we risk losing the momentum so many people in this room have helped generate. Momentum towards the widespread recognition, and moreover, progress of tobacco harm reduction.

 

If tobacco harm reduction is to become the tobacco control policy of choice, as I hope it will, it is clear that we must :

 

•  Educate people on its merits;
•  Showcase the science behind New Category products; and
•  Demonstrate that we can change sustainably.

 

As a result, I’m going to focus my speech on five key areas:

 

1. How I see our purpose at BAT;
2. Why it’s ‘science or else’ when it comes to tobacco harm reduction;
3. How BAT moves from insights to innovation to deliver for adult consumers;
4. Why I view our portfolio of brands as a promise; and
5. How tobacco harm reduction is already creating impact for good.

 

Furthermore, I will address two key questions: why we don’t just stop selling cigarettes and what the next phase of the GTNF might look like.

 

Because, how the GTNF evolves matters because this event matters. If we can’t speak our mind here, then where?

 

Before I get started, let me layout the premises. We are clear that nicotine is not risk free and is addictive.

However, we also know that which the weight of the evidence available today tells us. If a smoker who was not willing to quit were to make a complete switch, New Category products provide a reduced-risk alternative.

 

In making references to these products being 'reduced risk', I am excluding the products sold here in the U.S., which are, of course, subject to FDA's regulations.

 

Our purpose

 

BAT is celebrating its 120^th anniversary this year, so we are well-versed in change. In fact, I’d go so far as to say we thrive on it. If we are to be around in another 120 years, it will be thanks to our ability to adapt to change.

 

Perhaps the greatest change we’ve seen as an industry is the emergence of reduced-risk products*^†. As a result, reducing the health impact of our business has, for some time, been BAT’s ‘North Star’. It is encapsuled by our purpose to build A Better Tomorrow™.

 

Coupled with regard for our impact on the planet, it underpins our progress. I was very proud recently, therefore, that we were able to appoint Mike Nightingale as BAT’s first Chief Sustainability Officer – to orchestrate our ESG efforts in pursuit of ‘faster transformation’.

 

I have been fortunate to witness the impact of this strategic refinement in real time. For around two decades of my 26 years with BAT, our revenues came, almost entirely, from a product that burns. Now, nearly one sixth comes from products that do not. As recently as 2015, when I started running our Next Generation Products business, it was zero.

 

So, with our transformation well underway, we remain firmly on track to hit our ambition of:

 

• £5 billion of revenue and profitability from New Categories by 2025; and

 

• 50 million consumers of our non-combustible products by 2030.

 

This kind of business transformation in such a few short years is virtually unprecedented. And yet, we are regularly asked, bluntly, when will the last cigarette will be sold?

 

Can we look forward to a day when BAT sells its last cigarette? Yes, I think that is indeed within long-range view. But it will require more than just the efforts of industry or governments.

 

Despite significant progress, the number of smokers globally has stubbornly remained at around one billion since 1990ⁱ .

 

Consumers are still choosing, for a variety of reasons, to smoke.

 

Therefore, we must provide these consumers with a portfolio of products that are a better choice than cigarettes.

 

And, so that consumers are able to make informed decisions about those choices, public health needs to accurately communicate risk, while the industry should be able to responsibly communicate the benefits of switching via appropriate marketing freedoms.

 

The advent of products that represent reduced risk compared to smoking make our aims possible.

 

Science or else

 

Science is the key to unlocking this potential industry transformation. In essence, for me, it is ‘science or else’.

 

Across the four current reduced-risk product*^† types – vapour, heated tobacco, snus and oral nicotine pouches –our focus has to be on producing even more robust and accessible science. Science that illustrates the benefits of switching to alternative products rather than smoking.

 

Of course, we, as an industry, need to contribute here, yet so too do regulators and the wider public health community. And it is essential that we remain collectively objective in our analyses.

 

Science has long been integral to our business at BAT. We have been conducting Research & Development for more than 60 years and appointed our first Group Scientific Director in 2012.

 

Ground-breaking studies, bolstering the science around New Category products have been undertaken, and it is these studies that add to the growing weight of evidence around the benefits of tobacco harm reduction.

Just recently, we published new one-year data on our tobacco heating product, glo. The data suggests that smokers who switched exclusively to glo experienced significant and sustained improvements in several indicators of potential harm compared to those who continued to smoke cigarettes.

 

The results from this study represent the most important data we have ever generated about glo in particular, and for the tobacco heating product category in general.

 

In June, we conducted a first-of-its-kind study of Vuse; designed to assess and provide new insights into the real-world health impact of vaping.

 

The study compares biomarker measures from Vuse consumers who have been using the product for over six months - with the results from smokers, former smokers and people who have never smoked. The results should be published later this year and we believe they will contribute to a better understanding of the role of our vapor products in tobacco harm reduction’s potential.

 

These types of studies can help move tobacco harm reduction to the mainstream. We need more of this kind of industry science, not just to underpin the stewardship of products, but to help turn the tide in the ‘court of public opinion’.

 

But this alone is not enough. Our voices cannot, should not and must not be the only one in this debate.

This transformation can be accelerated if global public health scientists embrace the opportunity to test and validate the benefits for adult smokers to switch to smoke-free, reduced-risk products*^†.

 

Together, all stakeholders have a responsibility to make a difference, in a whole-of-society approach. A ”whole-of-industry”, if you like, approach is also needed.

 

I remain ever hopeful that more engagement between the World Health Organization, governments and the “whole-of-industry”, will facilitate more progress in this area.

 

From insights to innovation

 

Of course, ultimately, it is the consumer that will decide which products they use.

 

As a business, we not only have the efficacy of reduced-risk products*^† to consider, but also consumer satisfaction. It is only relatively recently that the technology has caught up and enabled the development of reduced-risk products*^† that consumers increasingly find satisfying enough.

 

We need to marry the science of tobacco harm reduction with the realities of consumer behaviour. To achieve this, it is imperative that we have deep consumer insights; to see ‘over the horizon’ and to understand the preferences of consumers.

 

Moving from insights to innovation is, therefore, key for us at BAT, to guide us in the considerable resources invested into our R&D capabilities. In turn, this investment helps drive a step change in the pace and power of innovation. For example:

 

•  We have embarked on the transformation of our Global Research & Development Centre for New Category Devices in Shenzhen, China;
•  In Trieste, Italy, we are constructing a state-of-the-art Innovation Hub. This Hub will host a New Categories manufacturing site, innovation lab and digital centre of excellence; and
•  In Southampton in the UK, our global R&D centre is undergoing a transformational upgrade; creating an inspiring environment where our teams can thrive and innovate.

 

It is just these kinds of investments that will help us as we accelerate building the Enterprise of the Future.

 

Brands as a promise

 

Of course, good products are only as successful as the brands that underpin them.

 

In essence, neither products nor innovation are anything without brands. They are the signpost for quality and trust that lead to consumer adoption.

 

In Vuse and glo, we have worked hard to create two billion-dollar brands in just a few short years. Combined with the scientific weight of evidence, it is crucial that we have appropriate marketing freedoms. Freedoms to responsibly inform adult smokers about brands, the products they accompany, and their benefits compared to smoking. That is critical in delivering tobacco harm reduction.

 

As with every heavily-regulated industry, such marketing freedoms come with responsibilities. We are clear that none of our combustible or non-combustible products should ever be aimed at youth.

 

Our own International Marketing Principles provide detailed guidance to all BAT companies across our combustible tobacco and reduced-risk products*^† portfolios.

 

The information that companies in our industry provide to consumers must, fundamentally, be fact based. As that requirement is met, then so too the channels for distributing that information should not be curtailed. Social media, for example, can reach many more existing smokers if it is used responsibly and targeted at age-appropriate audiences.

 

Impact for good

 

Encouragingly, we see that where appropriate tobacco harm reduction policies have been adopted, smoking rates have reduced.

 

The UK, for example, saw a 4.3 percentage point decrease in daily smoking prevalence between 2014 and 2020. This was mirrored by a 2.4 percentage point rise in vapour product useⁱⁱ.

 

In Japan, tobacco heating products were launched in 2014. Between 2016 and 2019, the number of smokers fell by 10%ⁱⁱⁱ. Added to that, in 2021, combustible cigarette sales fell below 100 billion for the first time^iv.

 

In Sweden, the only EU Member State where the sale of snus is permitted, the rate of adult smoking is the lowest in the bloc at 6.4%^v.

 

With global smoking rates not having materially deviated in 30 plus years, these examples are bright spots in terms of what embracing harm reduction can achieve.

 

To put it frankly, the old tobacco control approach of ‘quit or die’ is perhaps akin to the oft quoted definition of insanity – “doing the same thing over and over again and expecting different results”.

We can see that, through ours and the actions of other responsible companies, every day, step by step, country by country we are positively impacting public health outcomes.

 

It’s not about where we are now, but where we are going. Our aim is to become a transformed business in a transformed industry.

 

So why don't you just stop selling cigarettes?

 

Of course, as I often experience, the question that follows is regularly “So why don’t you just stop selling cigarettes?”.

 

I can tell you, where tobacco harm reduction has been further embraced, we are closer than many think to answering the “last cigarette” question.

 

In those markets I mentioned earlier: the UK, Japan and Sweden, we have over half of our revenues in New Categories. Across Europe as a whole, that figure is over 20%.

 

It is also a question that has little regard for unintended consequences. We cannot ignore the impact that a sudden departure of a widely-consumed product would have on a market, as we have seen so vividly in South Africa during the Government-imposed sales ban.

 

Additionally, investing in innovative reduced-risk products*^† that will meet consumer preferences and deliver harm reduction needs substantial resources. Driving value from our combustible business allows us to make the investments that are needed to serve our consumers and society better.

 

Of course, I understand, this is a complex and multifaceted issue. One driven as much by emotion as it is by logic.

 

What is clear, though, is that the progress that is being made on tobacco harm reduction is real. And what’s more, we as an industry must continue to play our part. Why? Because our involvement is essential.

 

Time to act

 

So, what does this mean for all of us here at the GTNF? In short, I would argue that we must:

 

•  Evolve further and faster;
•  Accelerate stakeholder inclusion; and
•  Mature as a collective.

 

Despite the huge strides made in recent years to open this conference up, it remains, to a large extent, an echo chamber. A sometimes pleasant “comfort blanket” within which to air our views, whilst speaking mostly to people who already understand the issues.

 

As a network, the GTNF must embrace change and be more progressive still. We must do this because our efforts are working.

 

In the UK, the U.S., Canada, France, New Zealand, Japan and Sweden, the needle is moving towards tobacco harm reduction. But, globally, it stubbornly refuses to move fast enough.

 

More needs to be done to foster engagement with the WHO and governments globally. Article 5.3 of the FCTC does not, as often wrongly assumed, exclude engagement between industry and government. Engagement does not mean agreement, but it will facilitate the exchange of crucially important knowledge and data.

 

Nor would it be obvious why ‘exclusion’ in any form from the debate would enhance and accelerate tobacco harm reduction progress and the potential public health wins of the same.

 

So, we must be even more courageous, speak to the outside world further still and come together even more. Greater collaboration is key. Is it time, for example, for the GTNF to move from the networked forum that it is to operating more like a fully-fledged NGO?

 

I don’t have all the answers. Those lie, without doubt, in the many dedicated and passionate people in this room.

 

The challenge is clear. It is no longer the time for talk, but time to act, because tobacco harm reduction is too important for us not to.

 

Ladies and gentlemen, we are standing at a crossroads. It’s either more of the same, more ‘quit or die’, more path of least resistance, or we can chart a new course with tobacco harm reduction as our goal.

 

Thank you.