GTNF Founder Elise Rasmussen Shares Challenges Facing Tobacco Industry

Special statement:
This article has been authorized for publication by Ms. Elise Rasmussen;
This article only represents the author's personal views;

The original speech is as follows:

Good morning everyone.

It is my distinct honour to be standing before you today. The kind invitation extended to me was flattering but left me with some measure of trepidation. After all, in my role at The GTNF Trust, I am usually afforded the luxury of being on the other end of an “ask” – as some of you in this room well know – and my asking involves querying some of the foremost global experts on tobacco and nicotine issues. Today you get just me!

In keeping true to form, when I realized that I would be making a keynote, the first thing I did was ask around, so I’d be armed with the absolute latest knowledge from around the world. When I realized I’m one of only a handful of international speakers for the conference, I asked around again just before I came to make doubly sure!

My good fortune in being able to ask around to leaders across the main sectors of our industry not only stems from the many wonderful friends I’ve been lucky enough to make on my numerous visits to the beating heart of the global ENDS industry in Shenzhen, but also in the organization I’m here representing. That I can pick up the phone to Switzerland or London or Richmond, Virginia or Shenzhen and make sure I’m coming here with the most up to date information, is a direct result of the hard work I and my colleagues all around the world put into The GTNF Trust and its affiliated organizations to ensure that we are an open and inclusive forum convening global thought leaders, inspiring the next big ideas, and providing the information critical to decisions big and small.

My being here is about connections – meeting people, developing relationships, and then bringing that all together. And that’s exactly what we all do every day at GTNF, InFocus, Tobacco Reporter, Vapor Voice and The Industry Guide. We’re striking out to build partnerships like our exclusive media relationship with World Tobacco Shows and TabExpo or our strong friendships with peer organizations and civil society groups all around the world. And of course, there’s the international industry who sit on our board, are members of our parent organization, TMA, and are ensuring that the industry has a home to study, discuss, and solve the issues and questions important to everyone whom I’m privileged to represent.

It is my mission to connect people, information and ideas. GTNF, InFocus, Tobacco Reporter, Vapor Voice, The Industry Purchasing Guide and our media partnership with World Tobacco and TabExpo is the tangible result of our efforts to build bridges, throw our doors open to diverse ideas and perspectives, and to serve the industry and wider stakeholder community in the best way we know how: bringing everyone together.

This is vital in these challenging times. Across the world our industry faces increasingly complex challenges along a multitude of fronts. Connecting with thought leaders at a forum like GNTF, taking a deep dive into issues online at our InFocus virtual forum, catching up on the latest developments via Tobacco Reporter and Vapor Voice, finding a vendor with The Industry Guide, or getting a chance to do face-to-face business with clients and new contacts at TabExpo or World Tobacco or World Vape Events is a vital component to meeting the challenges we all face. I am energized by this – and believe me, all that connecting across time zones requires nothing if not energy. Everything we do is an expression of that energy, that passion, and that love of bringing people together and watching the ensuing magic of new ideas, new approaches, and expanded horizons play out right before our eyes.

And what are the challenges we face? Every market, every country is different but there are broad strokes of trends and issues that are apparent to me, and obviously to a room filled with experts like yourselves who see this in your daily business.

We can broadly categorize them as follows: (1) product type; (2) flavours; (3) regulatory; and (4) compliance. On product type challenges, we see increasing pressure on disposable ENDS products from an environmental perspective, relative to sustainability and disposal concerns. We see in Europe efforts that reach across the entire consumer package goods field to encourage the transition away from single use products that are not biodegradable or fully recyclable. There is also a concern in many markets about the utilization of single use ENDS by underage individuals, which is a catalyst to the increasing trend of bans on disposable ENDS.

In terms of flavours, we also see continued pressure. For many years traditional cigarettes faced legislative and regulatory pressure on menthol due to concerns about use by underage persons and initiation by nonsmokers. That pressure, and this reasoning, is now increasingly being applied to ENDS and other products. This is most acute in EU states and the United States. Just this past September, the head of the US FDA’s Centre for Tobacco Products, Doctor Brian King, addressed the GTNF Conference and spoke on an industry/academia government panel afterwards. In the US., especially, this has manifested into increasingly stringent product regulations. The US market is large and complex with multiple levels of government operating and, in some instances, contradicting each other. We have local flavour bans that include products authorized by the US FDA, for example. And we have the FDA itself taking a strict line on flavours via its premarket authorization process. Dr. King laid out the standard for authorization at GTNF: any flavoured product other than tobacco will need to demonstrate that the presumed risk of youth appeal is outweighed by a specific benefit inherent in the product beyond the FDA’s acceptance that an ENDS product is likely a less risky and harmful means of consumption relative to combustible smoking. This is on top of challenging economic conditions in the US., with US smokers being hit hard by global inflationary trends and volumes across cigarettes and ENDS trending downwards.

One interesting development I consistently hear from my contacts in the US is about novel oral products like snus and white pouches, which are typically flavoured. The US is a traditionally large market for oral tobacco products and there are lines of white pouch products (which contain synthetic nicotine and are engineered to pharmaceutical standards for tobacco harm reduction) and more traditional Swedish style snus products that have seen gains in market share and sales. The initial numbers, according to US research firm and TMA member Management Science Associates, show post launch growth of over 200% in the first few years and these products are now in comfortable possession of around 5-7% of total trackable US nicotine sales.

While perhaps not as deeply grounded in specific mechanisms like in the US, the global industry is keenly watching what happens with the EU’s third tobacco products directive, TPD3, which is likely to take influence from similar concerns around flavours and attractiveness to underage individuals. This is, however, balanced against compelling behavioural studies of adult consumers that flavours, whilst carrying risks of attracting underage persons, are also highly effective in assisting smokers to convert and stay converted from combustible cigarettes.

On the regulatory front, we see a lot of global action that my contacts around the world are watching. At 10,000 meters there is a tension between the promise of tobacco harm reduction (THR) and traditional tobacco control measures. Global regulatory trends, despite nearly two decades of the ENDS and THR industrial sector’s emergence as a major international market force, still reflect the newness of these products to policymakers and NGOs. Balancing innovation, the promise of consumer product type THR offerings, and the fact that longer term use cases are only now becoming ripe for study all contribute to regulatory trends that struggle to deal with the core issue of risk and harm reduction versus more stringent precautionary measures that lean heavily towards tough restrictions or outright bans.
 
The largest venue for this is the Framework Convention on Tobacco Control and its Conference of the Parties, now coming up on the 10th COP. I think we were all surprised by the postponement of FCTC’s COP 10 in Panama to 2024. Based on the provisional agenda made public in advance of the postponed November 2023 conference, global industry is looking for three areas in particular:
First is agenda item 6.3, which proposes regulatory equivalence between combustible tobacco and THR products. I’m sure that most of you in this room share the concern about striking an appropriate regulatory balance that ensures proper marketing and use of products. However, global industry is concerned that this equivalency proposal sets a precedent for imposing blanket regulations on all product categories regardless of their risk profile or the potential to convert smokers using the most risky products.

Next is agenda item 6.2, a proposed extension of the ban on tobacco advertising, promotion, and sponsorship to include THR products. In some countries this could infringe upon other rights and laws relative to commercial activities, creating a tension between the FCTC treaty and local constitutional and legal prerogatives. It is also directly related to the issue of balance. Proper promotion of THR products is necessary given the process by which a committed smoker transitions into an exclusive THR consumer. The track is not linear; it requires consumer awareness, trial of different products to find one that works best, and reinforcement to ensure that any transition is not temporary. The point of THR is conversion of smokers to exclusive users of less harmful products.

Finally, the COP10 agenda seeks to empanel an expert group to report to COP11 in two years on the end-game strategy to bring about the end of combustible cigarettes. The first e-cigarette, a Chinese gift to the world, was created to do just that. The concern is in the aforementioned other agenda items which seek, in a broad stroke, to wrap all nicotine-containing products together with combustible cigarettes. Again: the issue is equivalency and balance. THR products can be an important part of the cigarette end game strategy, but only if the market conditions exist to ensure a properly regulated and responsible universe of THR products is working in concert with other efforts.

The last area where my contacts see important developments concerns compliance. The balance of proper regulation can only be made in markets where the products are compliant with regulations. Noncompliant products encourage more stringent regulation than would otherwise be deployed. It is incumbent upon all stakeholders to play their part. Governments need to ensure that requirements are clear and understood so industry can follow the rules. Industry needs to work with government to assist in their enforcement efforts – I know many cases where GTNF stakeholders have and continue to assist governments with expertise in enforcement and product knowledge. This is a constructive process which holds the potential to generate trust and expand the working knowledge of authorities to best regulate industry.

Meeting these challenges is a tall order, but when I speak with industry leaders here in China and around the world, I do not get a sense of hopelessness. I hear about possibility. I come away emboldened to redouble my own efforts and those of my colleagues. Our mission, one of conveying, informing, and maintaining open channels to all stakeholders, is also why I share the sense of the possible so many of you hold.

I name dropped earlier in my address and I’m going to do it again. Within the universe of platforms at The GTNF, we are fortunate to welcome so many critical stakeholders. At the annual GTNF Conference, last year in Seoul and this coming September 24-26 in Athens, Greece – registration will open in Q1 2024 and I hope to see many of you there - we regularly welcome stakeholders to discuss the marquee issues impacting the global industry.

GTNF 2023 boasted our most diverse lineup of speakers, many of whom were outside the industry and speaking and engaging with us for the first time. In addition to the panel with Dr. King, we were privileged to have GTNF advisory board member and internationally respected executive Eve Wang, Executive director of Smoore International and vice president of Shenzhen Smoore Technology Co, Kezia Purick, Member of the Northern Territory Legislative Assembly for Goyder, Australia, and Adam Afriyie, Member of Parliament for Windsor, UK. Let’s take a look at them in action:

[Play Minute @ GTNF clips from Eve Wang, Kezia Purick and Adam Afriyie]

The sense of possibility comes not only from the hard work stakeholders do communicating and trying to reach a better understanding of the different positions, priorities, and requirements as this last clip so clearly demonstrated. It also comes from innovation. No where is the future closer to reality than in China and the epicentre of the nicotine industry at Shenzhen which boasts cutting edge R&D along with a critical mass of important supply chain participants serving the world.

Following these developments closely is Yuan University’s Professor Dr Deng Ming. Dr. Deng is internationally renowned and I’m very grateful that he has been a regular participant at GTNF bringing the perspective of pedagogical study of innovation along with an infectious optimism that inspires delegates from all over the world. In his GTNF 2023 speech, he encouraged the industry to innovate to address some of the concerns of policymakers. Ming urged COP10 to acknowledge the harm reduction properties of next-generation products, and encouraged state-level regulators to shift from a “wait-and-improve” approach to a “test-and-innovate” mindset. Doing so, he believes, will make the benefits of reduced-risk products available more quickly to consumers, and thus benefit public health.

Connection, innovation, the sense of possibility, and yes – challenges aplenty. This is a three-dimensional industry with complex problems. How else can we address regulatory headwinds? Compliance is key. When you don’t comply with regulations, you don’t just harm your own credibility and corporate image, but you tarnish the entire market and product category. This leads regulators to contemplate the easy option, banning the whole category. Ignorance is not a valid excuse. Use these platforms to learn about current and upcoming regulations, so you can make sure that you are one of the ‘good guys’ in the industry.

Finally, I urge you to use these platforms as a vehicle to drive change. You all have the same shared objective: to save lives through tobacco harm reduction. Collectively, through all of these channels, we cover the world. There is no corner of the globe we do not reach, meaning our influence is impactful and far-reaching. You can use this to your advantage. These channels allow you to come together as an industry, allowing you to share your innovation and work with each other to achieve this goal faster and transmute questions into solutions. GTNF, InFocus, Tobacco Reporter, Vapor Voice, World Tobacco, World Vape, TabExpo, and TMA – this is a 360 degree platform for a multidimensional industry where your message reaches across media, sectors, and issues to top decision makers across the world. It is my life’s work to bring this to you. And I stand before you today with the most powerful combination of platforms, forums, and networks ready to help you connect to the people, information, and ideas you need to address complex issues, push forward innovation, and make that sense of the possible into concrete reality.

How do you do that? How do we confront challenges, learn from each other, and grow in knowledge, network, and capability? Well we do what I’m doing… and I’m told I do very well… which is talk. Communicate. Engage. Spread your message, show off your innovation, talk shop and help each other solve problems because there’s a common interest to get things right to ensure THR fulfils its promise. My platforms are part of that process and can aid you. But the most important step to take is to engage, grow understanding, challenge yourselves with unfamiliar concepts and ideas to improve your products, your ways of doing business, and your opportunities in new and existing markets. Given the regulatory headwinds you are facing, now is not the time to be silent. You need to be proactive. You need to participate. There has never been a more important time to start building and expanding this partnership. I am excited to watch this journey unfold and see what each of you brings to the world in the coming years. Thank you all.

About the Author:

Elise Rasmussen is the Founder and Chief Director of the GTNF Trust, the parent company of Nicotine Forum and Tobacco Journalists, as well as the publisher and Sales Director of Tobacco Reporter, Vice President of Sales and Marketing at the TMA.