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Sud Patwardhan: Good morning, everybody, and thanks for coming here for this session. It's exciting to be at the GFN, and for many reasons, as you always know, it is very enriching and insightful, but also we hope in this particular session, which is, is tobacco industry transformation reaching LMICs, low and middle income countries, is the focus of the conversation. And I'm hoping that it gives us enough prompts, enough motivation to take into the conference and beyond in terms of actionable items. So on that note, I want to just say one thing about the field that we are in. I do not think there is any doubt or debate that reduced risk products should be available and accessible to consumers of risky forms of tobacco products in LMICs. I hope that is an absolutely accepted point. However, we know for a fact that if you were to travel in Europe, which you are in now, go to America, in Northern America, you will see the availability of a range of reduced-risk products, and by that I very clearly mean heated tobacco products, electronic cigarettes or vapes, and nicotine pouches and snus. If you were to travel in the world of LMICs, on the other hand, you may not see that. Having said that, the fact remains that nearly 80%, eight, zero, 80% of consumers of risky forms of tobacco live currently in LMICs. And before anyone starts wondering why the suit, by the way, I'm suit pat warden, just in case, why the suit keep on talking about risky forms of tobacco products, I'm very conscious that we do not want to just harp on about smoked or combustible forms of tobacco. There are parts of the world where a significant number of people consume smokeless tobacco products, especially South Asia and in Africa and Southeast Asia, where those products cause comparable harm because of the consumption among the consumers who use them. So, and hence, the less risky forms of tobacco and nicotine products, and hence, risky forms of tobacco products. So I'm trying to make that distinction very clearly from the outset, and you will see why it's important when we start talking to some of the excellent panelists who have agreed to be on the panel. So the idea is that we have experts from the consumer world, from tobacco control world, from the corporate world. We cannot leave companies and industry out of this conversation. We shouldn't. It's at our own peril. And someone who has come from a management world understanding strategy but also the business case for why or why not and whether companies should be transforming in a much broader way to meet consumer needs in LMICs. So that's the panel composition. You can look at your program to see about their detailed careers, but they're all excellent people from different disciplines who have converged here at JFN to be part of this workshop. So without further ado, I want to start with a consumer viewpoint, but also not just consumer viewpoint, a viewpoint coming from years of working in the tobacco control space in a country such as Kenya. And that's where I would like Joseph to use perhaps three to five minutes to kind of paint a very top line picture of what he has seen in his years of work in this, what may be the challenges he's seeing and facing. And then, of course, we'll go through this initial round of initial opening lines by each of the panelists. And then I will be asking some questions to all of them after that, following which I would love to hear much more active participation from all of you. So that's going to be the flow. Joseph, all yours, my friend.
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Joseph Magero: Thank you. Thank you very much, Sud, for having me here. So I'll just speak briefly on the challenges we are facing in Kenya. and Africa as a continent where at the moment we have about 77 million smokers on the continent. We have about a quarter of a million of them who die from smoking-related diseases. So mine here is just to learn and to ask what the industry is doing, because they're actively on the continent, and we at the moment cannot afford cessation services and products recommended by WHO, which are nicotine gum and nicotine patches, which cost about $50 to $45, and most smokers on the continent cannot afford that. So mine is just to learn what the industry is doing to help us because smokers are willing to switch and we keep hearing about these products on the internet and on social media happening in Sweden and other countries like England, but we have no access to these products. So mine is just to find out what they are doing for us.
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Sud Patwardhan: That's a great way to open the discussion, which we'll definitely come to. And Joseph, thanks for highlighting the need of not just 77 million users today, but it is, I believe, one of the fastest, quickest growing markets for tobacco companies for their combustible products. So let's not forget that this is not just for today's consumers, but also future potential consumers of risky forms of tobacco. Thank you so much, Joseph. I'm going to switch gears and go to Atul. And Atul, you come from a very interesting, rich background that has taken you across multiple continents, three at least at last count, including a stint at MIT and Boston Consulting Group, and working at least two specific things where I think you are your supply chain expertise, coffee and tobacco might be of interest for the audiences to understand how does tobacco transformation, tobacco industry transformation fit with what LMICs can get from these companies and whether there is a win-win there or not. So, Atul, please.
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Atul Agarwal: Thank you, sir.
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Sud Patwardhan: Nothing, just speak into it if you can.
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Atul Agarwal: Can you hear me all right? Can you hear me all right? Yeah, thank you so much. So it's interesting, Sudsena's opening remarks that if you go to the U.S., you will see a broad range of reduced risk products. If you go to India, you will equally see a broad range of risky products, right, from cigarettes to beelies to good cars to Kenny to snuff and even areca nut products, right? So there's a whole range of risky products. And, you know, when Joseph was opening his remarks, right, I mean, it is absolutely clear that consumers all around the world are demanding a reduced risk product, right? I mean, it is, they may not express it all around the world, but that unexpressed need is very, very strong. And it is also a fact that most tobacco companies have significant revenue and profit source from the LMICs, from low and medium income countries, whether you look at India, Indonesia, many countries in Africa, many countries in South America. So it's a big source for tobacco companies in terms of revenue and profit. And the other factor is that you know, of course there is the FCTC guidelines and everything, but these countries also have limited capacity or capability, and of course it varies across the country, to enforce those guidelines, right? So there's a bit of a, you know, regulatory uncertainty in this market which also impacts commitment from the tobacco companies, right? So, you know, the one thing that corporations don't like is uncertainty, whether it's the economic uncertainty or the regulation uncertainty. you know, the fact that the regulation rollout is also not consistent across the world impacts the availability of the products, right? But if you look at from the capability point of view, right, you see that in many LMICs You know, there is an absolutely strong structure to bring these products with great speed, right? I mean, let's take the example of India, right? I mean, you've got very strong consumer backed supply chain, right? Right from outlets to channels to market, distribution, manufacturing, product design, packaging, raw material sources. In fact, most of the nicotine, and correct me if I'm wrong, most of the nicotine globally gets sourced from LMICs, right? So the structure is there. And to me, as an observer from outside, you know, you see this kind of a K shape profile, you see this very, very strong take up in the developed world, but, you know, on equally you see no take up or very little take up in the developing world and, you know, I think what is expedient for this panel is to interrogate as to why that's happening. I mean, what are the critical questions that come to our mind? I mean, from, I can, you know, I can put forward five questions if I may, but there must be many more, and then, you know, we can collectively debate as to, you know, how do we bring this to life? I mean, the first question I have is, what business facilitators or catalyst do we need to see in LMIC which will motivate tobacco companies and the governments, right? And the consumers, the whole ecosystem to have a broad availability of reduced risk products. What are those catalysts and facilitators that we would like to see in the LMIC? The second question that comes to my mind is what is the decision matrix that companies are looking as they roll out these products around the world, right? I mean, launching new products for the consumer sector is a very expensive proposition.
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Sud Patwardhan: I would like you to finish that line, but that's very tempting for us and a very good segue into what the industry may want to respond to.
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Atul Agarwal: Okay, no, this is great. And you know, you also often see that in many of the LMICs, you know, where it is legal to sell the products, still those products are not available. So need to understand, you know, what is the reluctance, right? You've got everything there. So, you know, you've got the legal framework, you've got the regulatory framework, you apparently have the consumer needs. So, you know, what is the reluctance in launching products where it is absolutely legal to do so? And the final story I would, the final question I would like to ask is that what are the success stories in the tobacco industry and outside the tobacco industry, right? What are the exemplars, what are the stories that we can relate to and we can learn from and help a quick launch of those products? So yeah, so look forward to the conversation.
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Sud Patwardhan: First of all, thank you so much, Atul. You've listed out a range of questions, which definitely will stimulate a great discussion today. And thanks for bringing that perspective, which goes well beyond just a pure industry transformation. There's a lot of parallels, a lot of learnings, which we should try and tap into. A very vivid picture you painted, which I want to just kind of put it out here now before I move to Flora, is the fact that those who have traveled to India, for example, or are from India, would note that the range of tobacco products that are available, all risky, mind you, are phenomenal and quite saddening. But if you go to a local, what's called a pawn shop or a corner shop, they're all there for display. So of course, there's a point made by Atul earlier about FCTC and the implementation of the lack thereof is something to discuss in our panel going forward. But I want to hear from Flora, who is a very senior executive at British American Tobacco, has done roles in Western Africa and senior leadership roles, in the corporate headquarters of British American Tobacco and in America. So Flora, tobacco industry transformation, what's happening at BAT? What can you tell us about and what are your views about it?
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Flora Okereke: I hope I'm not the only one who's going to answer all those questions. Thank you. Thank you. Thank you, GFN, for the opportunity. What I need to say on the outset is this. LMICs, when I reference them, I'm looking at those 137 countries that the World Bank has said are LMICs. And I hope those are the countries that you are looking at. The first thing is the transformation. We ask the question, why is it not reaching where it's supposed to? Before I answer that question, I want to be clear from our perspective, when BAT says transformation, what we actually mean, because sometimes it might mean something different to ordinary people. A few years back, our company revisited our purpose and determined that the way to move forward is to focus on developing products that in the future or today, people who continue to use nicotine will have safer options to use. And we concluded that that would be the best way to improve or, how do I say, the societal expectation to make an impact in the negative impact of our business, to improve the health impact of our business. And I can tell you that led to a lot of actions, a lot of actions in the company to develop these products. This is why the variety of products that you see that are safer, is due to the investment that was made in science, in technology, and innovation, and it continues to happen. But the transformation is not just on safer product. It's a whole change in the organization, a change in behavior, a change in attitude. I need to say this because yesterday I listened and picked up this sentiment. It is still, when you reference the tobacco company, a lot of people still think of the tobacco company of 50 years ago. It is no longer like that. In fact, part of the transformation is the way we manage our waste, our resource, our water, our supply chain, our value chain, the way we manage our talent. It's interesting. If you looked at the announcement made recently on BAT, because there was a change in the CEO, it struck me personally that the highlight of what this new person have done was the reference to his team leadership and collaboration with talent and inclusion with talent. 20 years ago when I joined this industry, it probably would have been on his track record on volume and shares. Things have changed and that is what we look at when we say transformation and it will continue to be. talking about going back to the safer product and where it is launched. Today in BAT, we have launched this variety of products in 60 markets. 36 of those markets are vapor markets. 28 modern oral and our tobacco heated device. With respect to LMSCs for instance, okay, are we where we are supposed or where ought to be or where everybody would like it to be everywhere? Obviously the safer products in our concept is universal. I believe in health equity. And therefore, technically, it should be available access to everyone. However, that is not reality, is it? In the 60 markets that we have, in fact, the top 12 THP market, THP, I mean tobacco heating market, four of them are actually in LICs. Pakistan, for instance, is now the third biggest market when it comes to modern oral. Colombia, Peru, Bangladesh, Uzbekistan, these are all LMC countries. These are established vapor markets. In fact, today, Kenya and South Africa are being piloted. I am glad that you came from Kenya. If it wasn't for the pushback on regulation, modern oil will be in the 21 commercial markets today. But that couldn't happen because of the regulatory pushback. You asked, what are the considerations when you are trying to launch? There are several things. This is a commercial start. Apart from the regulatory framework, which we probably should come back to, there's also issues with cost, with pricing, with the local consumer taste, with knowledge. There is, if you think about it, there are challenges. A lot of the LMC countries, to be honest with you, have priorities, health priorities that go beyond thinking about smokers. I can tell you that 16% no, 16 of those countries probably have smoking prevalence that are less than 10 or less than five, but they have high incident of child death, traffic death, sanitary issues that kill cholera and malaria. And so thinking that they're going to focus on fuel smokers, and not this priority issues. It's a little bit. So there are challenges that push back, and I'm happy to revisit them. But all I can say is I have told you where BAT has launched. There's also our competitors who also have presence in their own product. By the time you put it all, it might not be as much as you desire, but we are making great progress. And the race plan in the next two years to launch in another 60 markets. So we are progressing.
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Sud Patwardhan: Flora, thank you so much. That's a very comprehensive review. In fact, this is great to hear from the companies, one example of a company which you represent. Regarding what is being done, I would definitely love to drill down into some of the challenges you face and some of the thinking. And as well, I would like to then bring the panel together to kind of start having a discussion. Well, is it really the case, and this is where I will look at Atul, Really the case that because price plays a role, but then is there any role for a much mass scale market for current consumers? So there's a bunch of things to pick on what you've said, the regulatory framework, and I would love to hear about how, what was the challenge, if you can talk about it, the Commessa challenge, which brings me to Joseph in a very circular fashion. Joseph, Flora mentioned the launch of nicotine pouches, modern oral, as you call it, but nicotine pouches, if I was to call it that way. Thank you. In Kenya. We have watched it from the periphery. Folks here might have seen for the last couple of years, a lot of ups and downs, a lot of news. Of course, sitting in London or in India, I would not necessarily know what is going on. Would you be able to sort of shed some light from what you have seen happening there and any learnings perhaps from a consumer, from a tobacco control point of view, but also now that you're part of a broader tobacco harm reduction community, what is there for us to learn if we were to do the same thing again somewhere else?
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Joseph Magero: First, I think the fact that the industry is trying to launch products in the country is a win for public health, and we support that 100%. However, I will take a small issue in the way the product was launched, in the sense that Yes, we do advocate for nicotine pouches to be made available, but the way the product was launched and how it was displayed in the shops was really one thing, because they sort of put it, it looks like a Christmas tree, and you have pouches all over the place. And so the backlash does not fall on the industry, it falls on the advocates. So we're here trying to promote these new alternatives, but the way they've been brought into the market is also wanting to some extent. And I did take issue with that, but again, the fact that the industry is trying is really a win for public health, and I would encourage other key players to also come into the market and try and bring in new varieties of products. The challenge we're facing in Kenya is that, yes, we do have a nicotine control act, but we should mimic the Swedish experience and try maybe and begin to explore ways to look for a nicotine act that is separate, that deals with the standards and with the advertising and things of that nature. And if we can engage policy makers and doctors and people, stakeholders, I think we can make bigger strides than we are at the moment.
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Sud Patwardhan: I want to pick on that point. Don't don't keep your mic yet. I may have another question to follow up. I'm so glad you've kind of put some light on what was not very visible outside that and unless you're on the ground you wouldn't know that the way the product has been launched is perhaps done in a in a way that is going to ruffle some feathers as such. What could have been done differently? I always, and this is going back to my days in pharmaceuticals, and there is this concept of market conditioning, where you work with the stakeholders in the market, you work with the various range of, starting from consumers, but also doctors and all the ones you mentioned. Is that something they could have done? Is that something you are doing? Is there any way out of all this?
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Joseph Magero: That's a bit tough. I think... What, just my opinion, what I think should have been done is perhaps maybe start with small steps and try introduce the product as a pharmaceutical product. I know it's supposed to be a consumer product, but if we had followed the right channels and maybe just put it where we have cessation products on the same stores, it would have been absorbed much easier and there wouldn't have been a lot of noise made in the media about it.
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Sud Patwardhan: This is a panel to discuss and throw ideas and have very different views, and they're all respected and welcome, and that's the whole idea. So thank you so much for that. I want to pick on something related to what you said, Atul. There are two things that got my attention. I don't know if the audience was listening, but I'm going to pick on those two things to kind of drill down. One is the K, what is it, K shape, K curve, K what?
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Atul Agarwal: Yeah, sorry for throwing that term, right? I mean, there is, I've got some muscle memory of being a former consultant. So apologies, if I just thrown a term, I mean, what it's referring to is, you know, you've got a very fast take up in the developed world, and a very low take up. So it almost looks like the alphabet K. nothing more than that. It's sounds more complicated than it is. So it's a very, it's just just a visual representation of what's happening in the marketplace, right?
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Sud Patwardhan: For sure. That's very helpful, actually. And that kind of leads to another thing you said about consumer backed supply chain. Yeah, I would love to understand more because I think there is something there that perhaps I have missed over the years of understanding what what RRPs need in terms of being reaching the right audiences.
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Atul Agarwal: I mean, to some extent, I mean, the companies like BAT have been immensely successful in designing consumer backed supply chain. What I really mean is that, you know, the traditional view of the supply chain is that you develop products, you invent products, and you kind of build a business model to reach to the consumer. What we need for RFP is just the reverse, right? You try to take it from a perspective of consumer and design the supply chain backwards, right? understanding how the consumer buys the product, what are the considerations when they buy the product, how do they consume the products, what are the occasions of consumption, then you design the product accordingly, then you design the channels to market, would they like to go to a shop and buy, like the pan shop Sud was alluding to, or would they like to buy online, so you kind of create the channels of market and you go backwards into the supply chain and design distribution and manufacturing and raw material sourcing. I think I'm not advocating that the product forward or the consumer back is, which one is better, but it just intuitively feels to me that for this, for reduced risk products, a consumer backed supply chain design is going to be quite powerful. And the industry is already adopting that in my view, which is very heartening to note.
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Sud Patwardhan: Thank you so much for that. For me, it's a great education in the context of how products are designed and where the kind of origin of the idea is, whether it's consumer demand. And as you said, there is no right or wrong. I would like to perhaps highlight over the last 10 years of GFN, I'm sure we have come here, many of us have for the last all 10 years. And we talk about some of the products that are currently considered reduced risk products to be almost a panacea for all the smokers in the world. It's often kind of just glibly mentioned, yeah, so this is for all the, and these markets and these countries don't allow it. And oftentimes I think, hang on, but have you actually gone on the streets of Pakistan and Indonesia and seen whether your product that you think is a reduced risk product actually meets the needs of that consumer? Can that consumer afford it? Do they care about it? And I think what struck me as a, and I'm not being unfair and biased, but I think it's an interesting insight when I saw that you guys had launched the pan masala flavored nicotine pouches in Pakistan. That, I think, is listening to the consumers, trying to meet them where they are. I appreciate that level of consumer insight and consumer reach. Now, before jumping into that floor, I thought it's also very interesting what you mentioned about transformation not being just a word. It's a cultural change. It's a behavioral change, attitude change, people change, and products become part of that change. That's quite enlightening. Now, you mentioned regulatory frameworks. What do you mean by regulatory frameworks and where do you think are the biggest challenges you've faced with regards to RRPs and LMICs?
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Flora Okereke: Let me step back a little. If we look at what has happened, so far our efforts have shown that 22 million of our smoking population have already taken on, switched to new products, new alternative reduced risk product. And we anticipate that in another seven years, this will reach to 50 million. We are on our way to doing that. There must be what enabled that growth to happen. That is not enabling when it comes to some of the LNC countries that I mentioned to you, that there are some challenges. If I tell you regulatory challenges, for instance, if I look at the 136 countries of focus that we're discussing, 26 of them has already banned vapor. 60% of those countries do not have regulation at all. And it doesn't mean that you can jump in there and launch because they don't. And places, big ones, you know, Argentina, Brazil, Thailand, Egypt, a lot of these places, have also closed their doors to these new products. So as long as those doors are closed, nothing is going to happen there. And the other thing, it was remarkable to see, and I'm happy to provide references, that if there was a survey that was conducted in Indonesia and India, A quarter of the people that smoke believe that if you stop smoking, you can actually harm your health. 12% of the smoking population in India said they were not aware of e-cigarette. And a third of Indonesians said they don't know what reduced risk products are. So there is a huge lack of either misinformation or lack of knowledge. And when I said part of the consideration for launching is appreciation of the product where these countries are. So there is a lot of challenges that are not just availability of products that happens, but regulation. If I were, and I'm not, if I were a regulator, and I believe in harm reduction, I will put a policy framework that will enable and encourage companies to even innovate, even better products, even safer products, to continue in the trade. That is what people do in other consumer goods. I will put in place a policy framework that will incentivize even someone who is not thinking about switching to switch. It could be pricing and costing, as you say. It could be preference and taste. It could be whatever it is, just to incentivize people to move. But I will also use technology and education to address issues of youth uptake. We can't forget that because this is all part of the whole scenario. And also puts resources for enforcement in one thing to put regulation, but it's also another one to ensure that it is done. There are few things that could be done from a regulatory perspective that will address some of the issues and challenges that I have said that we are facing.
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Sud Patwardhan: That's a very comprehensive review. And I think that sort of a regulatory framework as against prohibition is... is something that I think is not often talked about, at least in the relevant conferences and events, and it remains to be seen how that reaches first to the policymakers instead of a prohibitionist kind of agenda-driven, ideological-driven, anti-industry, anti-product stance, which is actually to the detriment of the consumers, ultimately. Atul, you wanted to say something?
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Atul Agarwal: So I just want to talk about the price and the cost. So when you're talking about the developing world, the scale economics are completely different. So for example, what a bicycle would cost in London, you can probably buy a new car in India. you know, the scale economics are completely different. And, you know, also let's not forget, right, so all the raw materials are fundamentally coming from the LMICs. So, and that is true with the existing products also, right? I mean, the cost of an equivalent cigarette, for example, or a pack of cigarettes in the UK is a lot more expensive than what you would find in the developing world. So, you know, there's no reason why we can't make these products affordable, right? Of course, there is a business case, there is, you know, all this, you know, the discounted cash flow, et cetera, that the companies need to do. So that's one point I wanted to allude to. And there's another point I wanted to say is that you know, how do we measure a successful availability of reduced risk product? Is it equivalent, you know, finding a ratio of equivalent sticks, equivalent of RRPs in the market, right? And, you know, and what is the percentage of that around the world, right? So, of course, we might say that we've launched these products in X number of markets. But how does it compare in terms of ratios? And at what price points? That's quite critical.
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Sud Patwardhan: That's very helpful. I'm going to just zoom back into what I like to always write about and talk about, which is the four A's. And let me think if I get it right. So the affordability, accessibility, availability, and appeal of adult-oriented reduced risk products. There's a lot of A's there and a lot of alphabets and words. But the point is, these are quite a few things to take. And Joseph, what you said really struck a chord with me, I thought. that for years, despite the FCTC, despite Article 14 of the FCTC stating that there is a need to roll out tobacco dependence treatment and there's a need for, and it's in the model list of medicines of the WHO, that nicotine replacement therapy is there, but it's not available at the price point that an average smoker in Kenya would afford, is that?
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Joseph Magero: No, it's not available. Like I said, gums and patches go for about $50. I've tried them before. And a cigarette pack? About $7, $5.
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Sud Patwardhan: This is not dissimilar to what I've seen in India. In fact, I remember going to a pharmacy in Dhaka in Bangladesh and was shocked because they were shocked to even hear the word nicotine replacement therapy. They didn't even know what it was. They like scrambled around, like, oh, let me go and look back. This is one of the biggest pharmacies in Dhaka. So forget the remote interiors. I want to turn this on its head and then kind of go to the audience, because I would love to hear some specific inputs that I'm going to point to people, unfortunately, but also the broader audience. I think there's an opportunity here, which where, for some reason, those who manufacture nicotine replacement or have done over the years, have not taken it as a cause for them to make available, cheaper, affordable nicotine replacement at all locations where cigarettes or other oral tobacco products are available. That's a missed opportunity. And if I was to look at you, Flora, and as a representative of the industry broadly, I would say, look, you have an opportunity to kind of take a higher moral ground for the right commercial reasons and make available RRPs instead of the risky products that are currently sold and reach those audiences, those consumers. But let me then kind of take a slightly different tack. There was work done, funded by the Foundation for a Smoke-Free World that I'm aware of, and there were a bunch of people, I'm sure here, I can see Peter, there's Amir, and I don't mean to sort of put you in a difficult spot, but if you don't mind talking about the work that Euromonitor and Peter Thruidwala did in terms of analyzing data for the Transformation Index. specifically about LMIC. So this is not about the broad index. I would love to see if there were learnings from that, that kind of tie up better with what we are talking about here. So maybe, I don't know, Amir, because you generated the data, and then Peter, because you analyzed it. So Amir first. Would you mind saying something about it? We can get a mic to you straight away. So just first name and a few lines, please. Thank you.
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Attendee: Hi, thank you. Yeah, I'm here from Euromonitor International. I'm here with my colleague, Irdre. Yeah, so we are the index research partner for the Tobacco Transformation Index, which is funded by the Foundation for a Smoke-Free World. What we do there is really, I think one of the main things which is relevant is the country fact sheet that we put together so that looks at 36 countries where we've got the most prevalent, really, of nicotine and tobacco usage, and we're sort of mapping out the legislation there. So, to Flora's point, you know, in a lot of countries it's banned, et cetera. So, yeah, I think that's probably, you know, something that might be relevant for people to look at, which is on the index website.
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Sud Patwardhan: Thank you, Amit. That's a great start. People can go and refer to that. I think there is some level of analysis, Peter, I'm hoping that you can perhaps touch upon in terms of the companies that you looked at within the index. Because from what I saw, I thought, wow, there are those who are leading the pack, and you would sort of expect to see them. But then there are those who are not necessarily there. And I would say tobacco industry transformation cannot be just a responsibility of the international players. Yeah, there has to be a locally driven national companies also have to take the role. So can you or would you like to shed some light on that? Can I have the mic here, please? So just in a few lines, please, Peter. Thank you.
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Pieter Vorster: Thank you. Peter from Idwala Research. I think I don't want to go into the specific data. I mean, Amir has mentioned that one of the things that they publish specifically or that is an area that they measure is the number of countries where these products are available. They also look at the number of products in each country, which to some extent is a bit of a blunt instrument because one country can be recorded as being present without a significant amount of products being sold. Nevertheless, I think when you look at the multinationals, as Suda said, there's a fairly broad representation. I think when you start looking at the other individual companies, It becomes an issue of regulation, whereas where you have single country companies, they don't necessarily go abroad, and I think the focus is not necessarily to do that, but very often these products are not allowed in those countries, and then if you lay on top of that what the excise structures are in those markets, it becomes problematic from a cost point of view to introduce these products. But certainly when you look at the overall, you know, if you look at the scores of the companies of where the, and correlate that to their transformation scores, it's quite obvious that the multinational public companies score the highest, the privately owned single country companies really score the lowest on quite a lot of measures, and somewhere in between sits sort of listed single country and private multinational. But, you know, it's very clear that where you have public scrutiny, international companies, certainly those companies score much higher on the transformation index.
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Sud Patwardhan: That's a very interesting – thank you so much, first of all, for talking about this on the spot and kind of illuminating this. I think the difference that you're highlighting – let me pick an example, and please, there may be better experts at this, but Indonesia, for example, with Gunanggaram, if I was – unless things have changed, they have not ratified the FCTC, right, as a country. So now, what does that mean? Is there a connection? There may not be. I'm just trying to sort of raise this conversation. I would love to start getting some inputs from the audience on is there a correlation where countries have not signed up to something and the basic tobacco control things have not been sort of put in place? I know in some places tobacco control can go over the top and their resistance to RRPs is quite worrisome, let me say that officially. But in some countries, tobacco control has not even gone there. Does that mean that the companies there, the one I mentioned, for example, in Indonesia, may not have the pressure for transforming? There is no need to. We continue doing our business and we can continue. Who are you to ask us? Is that what may be happening? And can I have some people sort of start throwing some insight if they have, or at least some challenges that, or how to overcome this even? Please. Oh, come on. Yeah, wait for a mic and introduce yourself, please. And you can look at me because they're going to show you from the screen.
00:42:43 --> 00:43:50
Attendee: Yeah, so I mean, I think one of the reasons I feel the transformation is not happening in countries where the provisions are already implemented, I think is the the synonymous use of terms, nicotine, tobacco, smokeless tobacco and everything. And I think the medical communities also miss it. and very blatant, which is very shockingly alarming when we did our own studies in India and elsewhere. So I would think that when companies, whether global or local, look at transformation as a tool, they ought to not ignore this fact that the awareness to nicotine and what nicotine is, what else makes it dirty? that in the dirty products. I mean, that distinction has to start with the medical communities, the healthcare providers, and then percolate down. That is something that I feel is not happening enough.
00:43:50 --> 00:43:53
Sud Patwardhan: Thank you so much. I think that, why don't you comment on that?
00:43:53 --> 00:45:47
Flora Okereke: Yeah, I was just saying that broadly I agree with that because this is what I was referring to as to lack of knowledge or misinformation, and everyone. needs to, when I say everyone, whoever is in the sector need to recognize this and they need to address it. It really is shocking to see that we might be talking about why is this not being launched here, and yet the number of people who don't even want to think about reduced risk products, that should be thinking about it. BAT has, it's almost like a foot on the door in India. If the regulation were to be different, that country, even if it's just to replace smokeless product with safer ones, it could happen overnight and quickly to a large population. But that can happen. And it has nothing to do with perhaps they are over there or any of the issues that we have raised. But I do agree with you that lack of knowledge, misinformation and training and awareness is something that should be part of that agenda. But remember, some of these companies and in some countries, you can't even communicate directly with your consumers. So it comes back. I'm not saying everywhere, but significant part of that, you couldn't. So the communication and the awareness, while I think the industry should contribute in creating the content of this communication, because we do know a lot about the products. But because of the limitation put by maybe policies, the driver of that knowledge building probably relies somewhere else, people like suit and the medical people.
00:45:47 --> 00:46:20
Joseph Magero: Sorry, just a question. Has the industry considered equipping advocates, because we have advocates across the continent who have knowledge about this stuff, but we're not able to carry out research and awareness campaigns simply due to lack of resources, if I may say. We've tried to apply to Bloomberg and other CTFK organizations and they cannot listen to us because we're including harm reduction. So is the industry looking at maybe giving opportunities to various tobacco harm reduction organizations?
00:46:20 --> 00:47:34
Flora Okereke: To be honest, if I speak personally to answer your question, personally. The industry, or at least BHC, would be willing, as I say, to contribute in any way that ensures that there is a correction. But just remember, as soon as the industry gives you a penny to help you to do that, you are cancelled. Whatever you say is no longer credible. And this goes back to what I was saying about changing and regarding the industry, as the baggage that you are carrying. So if you do, you're castigated. If you don't, you're castigated. But that has to change because the future and nicotine belongs to all of us. And we really have to forget about division and finger pointing and come together to find a way to turn something that is negative into a positive future, I think. We have to stoop to conquer and we need to do it collectively. Blaming the industry or one person or the other really doesn't accelerate tobacco harm reduction.
00:47:35 --> 00:48:52
Sud Patwardhan: Thank you so much for that question, Joseph, and thanks for the very clear, sharp response, Flora. I think it's helpful to remind ourselves, starting with Rajesh talking about nicotine illiteracy among key stakeholders to how that can be addressed and what are the resources available. What I can just chip in is saying some of the learnings we've had in our work in the last four years in the UK with mental health practitioners or professionals and in India with very structural, fundamental training of healthcare practitioners is it is a long haul, it takes a lot of effort, it has to be done by credible peers who will talk about nicotine and build that essential nicotine confidence. I do not want to be saying that this is the excuse for not launching, but I think it's definitely a reason why in some countries the regulatory framework that you desire is not gonna be there because there is still that confusion about nicotine and tobacco and smoking and smokeless and cancer. So that remains a problem. I think the more such forums or fora allow us to have that conversation and bring more people together, and then go and actually do something on the ground, allows us to be action-oriented and result-oriented. That was a great comment, Ajayji. Thank you so much. Clive, you want to say something?
00:48:52 --> 00:50:26
Clive Bates: Clive Bates I think we should get away from thinking of the concept of industry transformation as if it's one industry, you know, the sort of big tobacco of legend. The industry is extremely heterogeneous, and in particular, there is a huge difference between the multinationals like BAT, PMI, JTI, Imperial, and the state-owned tobacco monopolies, which actually dominate the tobacco industry worldwide. And I think there's resistance to transformation for rather crude competitive reasons. The incumbent tobacco monopolists and state-owned companies simply don't have the products. to compete in vaping, in heated tobacco products, in new nicotine pouches. So their interests are using their leverage with the state to keep these products at bay and to use their influence with FCTC delegations to keep a hostile environment for these products. Otherwise, they'll find that BAT, PMI and so on are eating into their share, pushing aside their market. So I think we need to stop thinking about the industry as one thing. There are differences between the main multinational companies, and there are huge differences between the main multinational companies and the state-owned and local monopolies. And they have very different interests. And the state-owned monopolies are a major barrier to industry-wide transformation, in my opinion.
00:50:26 --> 00:50:29
Sud Patwardhan: Thank you so much for that, Clive. So you want to comment something on that?
00:50:30 --> 00:51:14
Flora Okereke: I think that's a very good addition to make. And in addition to, just as he was saying about whose other interest towards the progress that is being made, if I look at again at the LMICs that we're looking at, the WHO has such influence and trust and credibility in these countries because of the systems they create, the health programs they do, and communication. And at the same time, They are also keen to tell this government not to allow reduced-risk products. And why would they not listen to them and listen to us? That's, again, another intervention that creates a challenge.
00:51:14 --> 00:51:43
Sud Patwardhan: I think, look, the complex ecosystem that we live in, where, in a strange, ironical way, there's a bunch of folks who have agendas against tobacco harm reduction almost come together without knowing. There's the sort of inter-governmental forces or above-governmental forces like the ones you mentioned. There's the state monopolies that you mentioned, Clive, and I think there is a strange kind of unspoken alignment there, which is to the detriment of the consumers locally. John.
00:51:43 --> 00:52:55
Jonathan Fell: Hi, it's Jonathan Fell from the UK. I want to ask a kind of complementary question to Clive's, really, We're used to thinking about industry transformation, as Clive said, in terms of the big tobacco companies, whether they're state-owned or multinationals. And when there were only cigarettes or traditional tobacco products available, the supply chains were limited, so it was only those guys competing. But in the new world, we've got vapes, we've got pouches, A lot of LMICs have very entrepreneurial business cultures, traders who are used to getting products out in front of people from all sorts of sources. Do you think there's a role for that in this debate, in terms of those products being put in front of consumers through new supply chains? Is that a good thing? Is it problematic? Could those companies actually, or could that route encourage and keep snapping at the heels of the multinationals to make sure they're trying as hard as they can in these places.
00:52:55 --> 00:53:11
Sud Patwardhan: That's a great question. Sorry, I thought you wanted to ask this to Clive. Is that right or not? No, it's to the panel generally. I passed the mic to Clive. Sorry, Clive. Ignore me. Atul, do you want to take this on? Because from a supply chain point of view, you're talking about disruption really of how products are available at the point of sale. Yes.
00:53:13 --> 00:54:00
Atul Agarwal: Absolutely, right. So the innovation can't be the purview of the few. And, you know, more widespread innovation you have, of course, under the framework of regulation, that's very important, right, because we need to be sure that These products are designed and manufactured and distributed and sold as per accepted standards and guidelines. And if you look at any of the launches that have happened for some of the very popular products that we use, it's distributed innovation that gets consolidated after some time. The tobacco industry apparently started the same way 120 years ago, so why can't we adopt the same model now, right?
00:54:00 --> 00:54:48
Sud Patwardhan: Yeah, I'm gonna just push back a bit because I know that it's very tempting to look at disruptive models, and for sure that's the way we work and live today, and buying things online, for example, would be a way of doing it. But we also have to learn from what you've seen in the US, where unfettered access to those who shouldn't have access to the advertising and the continuous promotion of products has led to definitely a moral panic, and perhaps data may show that they were more than who should have taken up the products, and it was not intended for them. So there is a balance, right? Again, that's where the regulatory frameworks Flora you talk about come handy, because they're going to ensure that it is for the intended audiences, intended consumers. And it's easy to say, of course, the regulatory sweet spot is not easy to find. Ben, do you want to make a comment? And then there's Jose after this.
00:54:49 --> 00:56:37
Bengt Wiberg: I'm Bengt Wiberg from Sweden, founder of EU4Snus and also inventor of a new pouch technology. I think Flora said something which is extremely important. She mentioned regulation and what is, if not the biggest problem why we are not seeing the Swedish experience with the lowest rate of smoking, the lowest rates of tobacco harm. Why don't we see that in the rest of the world? I think because of total lack of regulation, it is a deterrent for the industry to launch safer products If there's no regulation, there's a big uncertainty. In Sweden, last year, came an extremely intelligent regulation regulating all tobacco-free nicotine products, such as e-cigarettes, nicotine pouches, and the regulation even covers products that are not yet invented. It's like a Bible of 600 pages. It still has not been translated to English, just the summary. So my suggestion to the panel, can we, by exporting, so to say, the very comprehensive Swedish regulations, to other countries, instead of every country inventing the wheel, so to say, again.
00:56:47 --> 00:58:23
Alexander Nussbaum: Thank you. My name is Alexander Nussbaum. I'm the scientific spokesperson at Philipp Morris Germany since 2016. I would like to comment on your earlier discussion about the cost of pharmaceutical nicotine replacement therapies. In Germany, we don't have reimbursement of these therapies and I think we all agree that if you distribute these products at a lower price or reimbursed completely, you get more quitting attempts and I think in studies also maybe a doubling of success however, I would like instead of if you There's a danger in focusing on this question I think and you lose the smoker out of sight because in Germany for example We've done surveys on the barriers of smoking cessation and also of switching and this was a topic of professor Glover's workshop this morning where we Asked smokers, 1,000 smokers in 2021 and 1,000 in 2022, and we have a five-minute video here, and we have a paper on chaos. You can look at it. There, we see this is a very minor barrier to smoking cessation for smokers. In Germany, we have 35% smoking prevalence and less than 10% seriously try to quit per year. I think the question of the nicotine replacement therapy is the cost is actually an argument for harm reduction. We need these additional tools to complement what we have. Try everything. get everything to the smoker as we can, including, of course, the pharmaceutical products. But I think this just shows that there is a need for something else, and the smokers need replacement.
00:58:23 --> 00:58:34
Sud Patwardhan: Thank you so much for that comment. Jose, and look, I'm going to just try and close this after Jose's comment, unless there is any more, because we want to have one line each before we close. So Kgosi, quick one, please.
00:58:34 --> 01:00:42
Kgosi Letlape: The first is to go back to the beginning. You spoke about risk-reduced product. And then you say the products in India are risky products. It might be better to be consistent if you talk about reduced risk and talk about high risk, so that there's consistency in the language. And it could be educational to the communities to know that these are not without risk, but the risk is reduced. The second question is this issue about transforming industry. Part of the confusion for society is that you have this industry that is transforming, but they are still the major producers of the high-risk product. How do we get to a point where the separation between production of high-risk product and production of reduced risk product. Because you know, it's very difficult to talk about a reformed pedophile that can now be given permission to run a kindergarten. So if we get a clear separation, it might begin to build trust, where the RRP companies become RRP independent companies. When you look at the story of Sweden, I'm intrigued by the fact that those that decided to produce snus at some point decided to sell the cigarette business so they could concentrate on the non-combustible product. So I think there's room to have that discussion, because it would begin to go back to what Clive was going about, so where you can isolate those that are still producing the high-risk product. and be able to say, we have a new core now that is concentrating on RRPs. Because it might improve the levels of trust.
01:00:44 --> 01:01:39
Sud Patwardhan: Thank you so much, Jose. This is very helpful. I think, look, it's important to have different viewpoints. Not everyone may agree or not agree with that. And that's absolutely fine. That's the way this works. I know that we have literally 11 minutes. And what I would like, Flora, I'm very happy for you to pick up or try and answer anything that you want to from what Jose said or others said. But maybe that's part of the wrap-up kind of line. If I was to start with Joseph, for you two having sat through this panel, thought about this, specifically answer something about, so what next, in terms of you as a consumer, you as an advocate in Kenya, but not just Kenya, in Africa and beyond, what is it that you are going to go and do to ensure that that's going to enable more people who are currently consuming high-risk products, I've said that, high-risk tobacco products, to be able to access safer nicotine products? What are you going to do personally? What's your agenda?
01:01:40 --> 01:02:05
Joseph Magero: As an advocate, I think, for me, my next step is to try and introduce a nicotine act that is separate from a tobacco control act. I think that should be a step in the right direction. Secondly, also as Hosea said, I think it would be a brilliant idea to have companies that have not sold cigarettes before to be the ones that are introducing these products in the market. It would work much faster.
01:02:07 --> 01:03:03
Sud Patwardhan: Thank you so much. And look, again, there is no right or wrong answer. This is what you're going to pursue and all the best for your plans. Atul, if I may go to you next, just because that's the sequence we have followed. And if you want to tell specifically about areas where you talk about supply chains, you talk about transformation in terms of countries, LMICs, where the product is currently not available because it's very costly or it's not seen as a profitable one. Before you answer, I just want to poke you regarding what CK Prahlad, the big management consultant, talks about the pyramid and the base of the pyramid. I suspect that maybe what you are referring to when you talked about the scale economics, also in terms of the number of consumers. So yes, maybe a big company, either a transnational or a local national company, cannot sell their e-cigarette for $20 or $50. But they're going to sell it to a good 200 million people. Would that not be a good idea?
01:03:06 --> 01:06:09
Atul Agarwal: You see there are, in the history of business strategy, there are a number of examples where people, when companies specifically see the potential of a certain product, they start pricing the products in terms of the quantities that they would eventually end up selling, right? So they calculate the price economics and the cost economics and the scale economics around what the volume is likely to be as opposed to what the volume is right now. And the cost starts falling in place very quickly. So there are a number of examples around it. And I think that is what is needed, right? And also, different countries have different scale economics, and one has to recognize that. I mean, that has been discussed quite deeply in this panel, right? So the cost economics in the US is not the same as the UK. It's not the same as Indonesia. It's not the same as India. And that is something to be cognizant about, right? And going back to the consumer-backed thinking, that how are the consumers going to buy the product is going to be 10 times as what Joseph was mentioning in Kenya, right? So that just defeats the purpose. But I want to come back to Jose's point on disruption. Can companies disrupt themselves? Very, very difficult, right? Kodak had the digital camera in the laboratories for many, many years and it was not Kodak. And it was, when Kodak had the digital camera, And they knew that this was going to be a big success. They were actually investing in a silver nitride film plant, one of the world's biggest. So it's a very, very difficult proposition for businesses to disrupt themselves. But the tobacco industry is doing very, very well up until now. So hopefully, there is a different business model coming here. And I think there's one more point I want to say is that. If the issue is big, the opportunity is also very big. And this is not an easy solution. And we've got a number of things that is impacting us around in humanity right now. There's energy transition, there's climate, there's food security, there's water security, there's pandemic. And each of these things takes huge effort. The pandemic probably, I don't remember the number off the top of my head, but it was a few trillion dollars. to sort out the pandemic. So when there is a will, there is a way for people to come along, there's organizations to come along, there's pharmaceuticals, healthcare professionals, industry, regulation, and ordinary citizens on the road, right? They all came together and we solved the crisis. I think probably we need to do the same thing with energy transition and probably this also falls into the same class. I mean, we can't have so many unnecessary deaths
01:06:11 --> 01:06:58
Sud Patwardhan: That's a great way to kind of summarize what you came to the panel to talk about, and I really appreciate that input. One, you get the last word, nearly, after which I'm going to summarize. But Flora, I love the fact that you had this ambition to go to 50, 5-0 million consumers of BATs, reduced-risk products, by 2030. And that's a very commendable number, right? I mean, every person counts. Every smoker who has managed to switch to a safer product, I'm happy for that person. But in the global context, 1.3 billion people consuming risky forms of tobacco or high-risk products. 50 million, 2030, is the ambition too short? And can I sort of just provoke you to say, look, why not say that, look, we're going to conquer at least 500 or all the 1.3 billion and not leave anything for any other company even?
01:06:59 --> 01:09:07
Flora Okereke: Talk is cheap. I can say we will do one billion if you want me to say so, but there's a reason why that is a calculated commitment. But obviously, it could be more. And if we did 50, and the rest of the industry and the sector did 25, you are almost there. But with respect to disruption and Kozi's comment, I think the business model that you see in the new tobacco company, remember we are expanding to non-nicotine stuff, new source of income stream, optimizing our FMC cigarette business to get valued in order to accelerate the other side. It's a matter of time. It's a matter of time. I don't think you'll expect that you can shut the door of the cigarette factory today and just because you have 20 million users on this side. That is why it's a transition. It's a journey. If you look at the oil company, that's what they're doing. It's no different. But more importantly, though, I pick up on the stuff that you said, Mr. Snooze. Yes. So you say, how can we... The Swedish model or the Swedish experience is something that you brought out that I think we have a perfect opportunity in November during COP. to showcase that to the LMSC countries and to ask them to look at and explore how that could be replicated. I think it's a perfect point that you bring and I do hope that we utilize that opportunity on a global platform to talk more about how we offer the opportunity for every smoker, if they wish to, to transfer to something safer for them to use.
01:09:07 --> 01:11:06
Sud Patwardhan: That's a great way to summarize what you came to represent here and also take it to the much higher level of global regulatory policy and correctly pointing to COP10 as the next kind of big milestone where some of the harm reduction voices have to have their voice and be represented accurately. and not from a single-sided kind of viewpoint. Thank you so much for that, Flora. And thanks, of course, to Joseph and Atul for being such great, bringing such a variety of inputs, but also depth of knowledge. If I may summarize and finish this in the next one minute, I would like to thank you all for coming here, for sure. And also, just flag what what drove us to do this panel. It's important to remember that, as I said, 80% of the world's users of risky products live in LMICs and that's not just a glib statement for impact. It has to be a reminder every time we talk about tobacco harm reduction in anything we do saying, is our work gonna reach the last person who's disadvantaged by this consumption, who's gonna have 10, 15, 20 years less of his or her life and their families are gonna suffer with that. This is something that keeps me going and has done so for the last nearly 20 years in my career in this space. But every time you see anything that's been talked about at GFN and beyond, I would like you to have LMIC, but not just LMIC, LMIC and disadvantaged populations in the developed world. anyone who otherwise would not be a natural, logical person to pick up the next newfangled device that you think is cool. It may be fine for some of the current consumers who are using these products, but I think we have to take it way beyond where it is currently being used. And unless we have that mindset, all this is just a good, fun exercise, but it's not going to make any difference in public health. So if we want to own public health, we have to think of LMICs and disadvantaged populations. So I don't mean to preach beyond this point, but thank you so much for being very patient listeners and great contributors. So thank you so much to all. Cheers, please.
