Regulation is not a dirty word. Handled correctly, it can be a blessing in disguise. The modern tobacco industry has been regulated since the mid-1960s. The severity of current regulations vary considerably by country. It all began with restrictions on advertising as to why Big Tobacco doesn't fear regulation.
Advertising
How to go about regulating the tobacco industry? That was the question the government set out to answer. The belief was that the best way was to restrict their ability to communicate with their customers and prospective customers.
At first, the industry tried to stop them. They were confrontational. Their natural inclination was that they had to advertise, after all, if no one knew about their products, no matter how great they might be, they could not stay in business. From their perspective, that was totally logical and rational and true for every business. So, the industry decided to stand up for their rights. After all, you can’t run a business and sell your products if no one knows about you or them. You have to be able to communicate with your customers.
After a while, cooler heads realized a flaw in the logic: In an environment where all companies in the industry are not allowed to advertise their products, to communicate with their customers and potential customers, then:
First, everyone in the industry is on an even playing field. No one has an advantage over anyone else.
Second, market share is protected as it is unlikely that customers will change to new/different brands, because new brands cannot advertise either. Moreover, no new manufacturers will be able to enter the industry because no one will know that they exist.
Third, the money that would have gone to advertising can go to other things, such as Research and Development. In the case of Tobacco, this meant creating replacement products for nicotine and cigarettes. R.J. Reynolds spent over $1 billion developing Eclipse and Premier. These were cigarette replacement products – heated smokeless tobacco. Users would inhale the vapors but not the smoke.
Vaping
Until vaping came along, these replacements were mostly rejected by the consumer.
For the record, vaping is not the same as cigarettes. It does not provide the pleasure of an actual smoke. It may be safer, but not totally safe, and is not as enjoyable.
Despite this apparent failure of finding an alternative to the cigarette, Philip Morris is conducting an international marketing campaign, “Unsmoke Your World,” to get everyone to stop smoking in favor of alternatives. The website, https://www.unsmokeyourworld.com, begins with the statement, “Quitting cigarettes and nicotine altogether is actually the best choice any smoker can make.” Yet, the company has been heavily criticized for continuing to sell their products. That’s logical, but so is Philip Morris’s retort that their competitors would take over their business, sell to their customers, and then they would not have the money to develop the safer alternatives.
New Century Brands
Now I must correct, or clarify, something I just wrote. As I mentioned previously, there is, in fact, an alternative to cigarettes, a different type of cigarette. And this story is hard to believe:
There is a new cigarette manufacturer that cannot only advertise their products in the way other tobacco companies in the United States are not permitted, but has even obtained FDA approval for their advertising campaigns and their actual product! Why? What makes this cigarette different from all other cigarettes? The manufacturer has reduced the amount of nicotine in their cigarettes, and the FDA has given them permission to state, on their packaging, that their cigarettes will help smokers stop smoking or to smoke less. In other words, the FDA has allowed the manufacturer, New Century Brands, part of 22nd Century Group, to claim in their marketing materials that their brand of cigarettes, not vapes, but a product named “VLN,” and are real cigarettes, has health benefits!
According to the company’s website, https://www.xxiicentury.com, VLN cigarettes have 95% less nicotine than conventional cigarettes. Of course, this is so outrageous that there is no need for the company to pay for advertising. The press takes care of that for them for free. The April 14, 2022 headline in Crain’s Chicago Business reads, “The people making these cigarettes want you to smoke less.”
So not only do they get free advertising from newspapers, but they also have a one-page website, a landing page, www.tryvln.com, where you can go, set up an account, and they may very well send you samples of their products.
What is so unbelievable is that, while there may very well be 95% less nicotine in a VLN cigarette than in a regular smoke, there is still arguably the same amount of tar and other toxic ingredients. As noted, tar and carbon monoxide are what kill; nicotine only addicts. So, if a person who smokes a VLN needs the same “kick” that they get from a regular cigarette, that means they will smoke more VLN cigarettes, perhaps substantially more, to get their fix, and, at the same time, they will be ingesting substantially more tar and carbon monoxide into their bodies. So where is the health benefit? Smokers would be better off with more nicotine and less tar and carbon monoxide. To be cynical, VLN may simply be trying to get people hooked on their product and, with the low nicotine, consumers will purchase more of their cigarettes.
Drinking Vs Tobacco
This is analogous to someone, use to drinking beer with a 5% alcohol content, who starts drinking beer with a 2.5% content. They will simply drink twice as much beer to get the “kick” they want. They gain nothing from drinking a can or bottle of beer with less alcohol, and lose by drinking twice as much of the rest of the contents of beer which may be bad for them in that volume.
Fourth, there are plenty of reasons why people buy a product besides the influence of advertising. Yes, tobacco is addictive because of the nicotine, but what about sugar, fat and even technology? Do we buy because we saw an advertisement or, already knowing of the existence of the products, do we buy to fill a need?
Why Big Tobacco Doesn't fear Regulation
Fifth, advertising is not only about attracting new customers to a brand. It can be about trying to get customers to switch from one product to another. Take cereal, for example. No company advertises to convince people to have cereal for breakfast. That is a given. They advertise to get the consumer to buy – continue to buy or begin to buy – their cereal. And, sometimes, they compete with themselves trying to get the consumer to continue to buy from them, but just a different product.
And sixth, not being able to advertise does not translate into fewer sales. The entire history of modern Tobacco proves that. People will buy what they want, if they need it, regardless of the obstacles.
So much for advertising. The next regulation was on the product itself.
The government’s decided where tobacco products could not be sold, to whom they could not be sold, and what could not be in them. At first glance, this all appears to be the very definition of an industry killer.
The government is telling everyone that they can’t buy tobacco products except in acceptable locations and only if they are above a certain age. The products cannot contain menthol. The companies cannot use product descriptors. The products cannot contain certain flavors. But again, if these rules apply to everyone, it keeps the playing field level, so no one has an advantage or disadvantage.
Tobacco
Permit me an aside, albeit an important aside: The main ingredient of a cigarette is, of course, tobacco. What separates cigarettes is the quality of the tobacco. In the US, the Burley leaf is mostly used to create that famous “American Blend.” It is heavy and harsh, but has a wonderful flavor and provides a deep and satisfying smoke. Since it is harsh, additives were added for flavoring such as orange, cinnamon, and chocolate, but not to appeal to children as was falsely claimed. Marlboro Lights, one of the most popular cigarettes with women, were cocoa flavored.
On the other hand, in Britain & Canada, they use the Virginia leaf (ironic, if you think about it!) which is finer and smoother than the American counterpart, and doesn’t require the same amount of flavoring to dampen the harshness.
In any event, all of the rules I have mentioned really do constitute regulation. So, even if there was no MSA in the United States, since the FDA regulates the industry, they are actually telling consumers that it is alright to smoke, otherwise they would ban it. Liability, therefore, attaches to the government and not the industry. Think about it: The FDA would never approve a drug that killed one in a thousand people. Yet, you can smoke.
Of course, children cannot. It’s a logical restriction. And it would be foolish to oppose it. First, it looks bad, but, more importantly, opposition is not necessary. The manufacturer sells its products to retailers. The retailers sell the products to customers. And if a retailer, breaks the law and sells cigarettes to minors, it’s their fault, they are to blame, not the manufacturer. So why fight it?
So, the risks to the industry, to the companies, involved with the use of their product, are spread around. Someone else now takes the blame. And that someone is the United States Government, His Majesty’s Government, the Canadian Government…
Public Safety
Regulations are not unique. Just as the FDA is supposed to protect consumers and their health, so too, in the United States, is the Federal Trade Commission and its Bureau of Consumer Protection which “stops unfair, deceptive and fraudulent business practices.” And then there is the US Consumer Product Safety Commission which regulates, among other things, the toy industry. They are the ones who keep children safe from choking hazards. In other words, for all these agencies, whether they deal with toys, lead paint, contaminated drinking water, furniture that needs to be bolted to the wall so that it won’t fall on anyone, etc., public safety takes precedence over everything else. But not when it comes to tobacco. And if the regulator does not stop the dangerous activity, then the regulator must bear some of the responsibility for the consequences.
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