WEBVTT - André Calantzopoulos on Profiting from Nicotine 0:00:03.520 --> 0:00:07.720 Hi, I'm Ethan Natalman, and this is Psychoactive, a production 0:00:07.760 --> 0:00:11.600 of I Heart Radio and Protozoa Pictures. Psychoactive is the 0:00:11.640 --> 0:00:15.040 show where we talk about all things drugs. But any 0:00:15.040 --> 0:00:17.840 of you has expressed here do not represent those of 0:00:17.920 --> 0:00:22.760 my Heart Media, Protozoa Pictures, or their executives and employees. Indeed, 0:00:22.760 --> 0:00:26.000 heat as an inveterate contrarian, I can tell you they 0:00:26.000 --> 0:00:30.280 may not even represent my own and nothing contained in 0:00:30.320 --> 0:00:33.240 this show should be used as medical advice or encouragement 0:00:33.280 --> 0:00:43.760 to use any type of drugs. Hello, Psychoactive listeners. My 0:00:43.800 --> 0:00:47.840 guest today is Andre Collinsopolis. He is perhaps the most 0:00:48.040 --> 0:00:51.400 famous current figure in the world of big tobacco. He's 0:00:51.440 --> 0:00:56.080 worked at Philip Morris International, the huge tobacco conglomerate, for 0:00:56.160 --> 0:00:59.520 almost forty years. He's been the chief operating officer, the 0:00:59.560 --> 0:01:02.800 chief ex ecutive officers now chairman of the board. And 0:01:02.840 --> 0:01:05.600 I want to be talking to him today for two reasons. 0:01:05.959 --> 0:01:09.160 One is, you know what's it like to head one 0:01:09.200 --> 0:01:13.520 of the most vilified companies in the world selling a 0:01:13.560 --> 0:01:17.520 product that kills half the people who use it as designed. 0:01:17.959 --> 0:01:20.680 But at the same time he has been the most 0:01:20.760 --> 0:01:24.920 forward thinking and outspoken of the big tobacco leaders in 0:01:25.040 --> 0:01:29.520 advocating for a rapid transition from cigarettes and other combustible 0:01:29.560 --> 0:01:35.240 forms of tobacco to e cigarettes, inhalable forms and other 0:01:35.800 --> 0:01:40.319 harm reduction approaches. So, Andre, thank you so much for 0:01:40.400 --> 0:01:43.880 agreeing to talk with me on Psychoactive. Well, Leathan, thank 0:01:43.880 --> 0:01:46.600 you very much for having me, and thank you for 0:01:46.800 --> 0:01:51.360 this very nice introduction, which I don't think I deserve 0:01:51.480 --> 0:01:53.640 everything you said, but I'm very happy to be on 0:01:53.680 --> 0:01:56.000 the show. Okay, so let me let me revamp it 0:01:56.040 --> 0:01:59.000 a bit dead. So some people, you know, would regard 0:01:59.080 --> 0:02:02.680 you as sort the devil incarnate, right, the guy who's 0:02:02.800 --> 0:02:05.560 leading one of the biggest companies in the world that's 0:02:05.600 --> 0:02:10.480 selling these tobacco cigarettes cancer sticks that kills half of 0:02:10.520 --> 0:02:14.800 all long term users when used as directed Right, you know, 0:02:14.880 --> 0:02:16.960 eight million people are going to die this year around 0:02:17.000 --> 0:02:20.040 the world from smoking, either directly or from second hand 0:02:20.040 --> 0:02:23.160 smoke in some cases. On the other hand, you've also 0:02:23.240 --> 0:02:25.240 been the head of a company which is made what 0:02:25.320 --> 0:02:28.720 appears to be of all the big tobacco companies, the 0:02:28.800 --> 0:02:34.000 most serious commitment to to basically shifting out of combustible 0:02:34.000 --> 0:02:38.880 cigarettes into other forms of nicotine consumption. That are widely 0:02:38.960 --> 0:02:41.919 believed to be much safer. So I want to start 0:02:41.960 --> 0:02:45.040 off by saying, you know, I saw the fellow. I'm 0:02:45.080 --> 0:02:47.240 not sure I pronounce his name, Old Jack, your CEO. 0:02:47.360 --> 0:02:48.960 The guy who worked for you for many years, has 0:02:49.000 --> 0:02:52.760 replaced you as a CEO he said. Last year, he goes, 0:02:53.080 --> 0:02:56.000 I want to allow this company to leave smoking behind. 0:02:56.440 --> 0:02:59.239 I think in the UK ten years from now maximum 0:02:59.280 --> 0:03:02.280 you completely solve the problem of smoking. And when he 0:03:02.320 --> 0:03:04.760 was then asked that then, Philip Morris, we started selling 0:03:04.760 --> 0:03:08.919 traditional cigarettes in the UK within that time, he replied, absolutely. 0:03:09.520 --> 0:03:13.519 So say a little more about that. Well, let's give 0:03:13.600 --> 0:03:17.840 some context for the audience. Clearly it's very well down. 0:03:17.919 --> 0:03:24.720 Cigarettes cause disease and unaddictive and premature deaths. So what 0:03:25.160 --> 0:03:27.640 is less known is the reason or the main reason 0:03:27.720 --> 0:03:31.040 for that. And the main reason for that is combustion, 0:03:31.200 --> 0:03:35.320 the fact that we burn tobacco, and that's what creates 0:03:35.880 --> 0:03:40.840 most of the toxic substances that cause morbidity and mortality. 0:03:41.840 --> 0:03:45.480 So the answer to resolving the problem for the people 0:03:45.520 --> 0:03:51.360 that would otherwise continue using cigarettes is not to combast 0:03:51.840 --> 0:03:55.680 a substrate. And the first thing we did is to 0:03:55.800 --> 0:04:01.520 develop a portfolio of products that comprise heated tobacco, so 0:04:01.680 --> 0:04:06.000 heated the temperatures that don't create combustion, which diminishes very 0:04:06.080 --> 0:04:12.800 significantly the toxical is generated by We also have products 0:04:12.920 --> 0:04:17.799 in what is more known in the US, like vapor products, 0:04:17.880 --> 0:04:21.080 and we also have products that are in the form 0:04:21.160 --> 0:04:25.800 of pouches that contain no tobacco at all. So all 0:04:25.839 --> 0:04:29.599 these products do contain nicotine because that's important for smokers 0:04:29.640 --> 0:04:33.240 to switch, but they don't combast, so we have a 0:04:33.320 --> 0:04:38.400 very substantial reduction in their toxicity. The second thing to do, 0:04:38.680 --> 0:04:43.880 and we've done, is to substantiate scientifically that these products 0:04:44.160 --> 0:04:51.719 actually in pre clinical and clinical trials demonstrate reduction of 0:04:51.960 --> 0:04:58.000 toxicity exposure to the toxicans and eventually you know, the 0:04:58.160 --> 0:05:02.600 promise of a re action in morbidity and mortality. And 0:05:02.680 --> 0:05:07.520 we have submitted these studies to many countries, including to 0:05:07.640 --> 0:05:12.479 the US Food and Drug Administration, which issued in order 0:05:12.960 --> 0:05:18.320 that these products reduced the exposure and authorize their sale 0:05:18.520 --> 0:05:24.320 in the US. So I think, on one side, we 0:05:24.400 --> 0:05:28.600 need manufacturers to invest in developing these products and then 0:05:28.760 --> 0:05:33.720 put their hearts and their money behind convincing existing smokers 0:05:34.120 --> 0:05:38.240 to switch to these products. But this is the first 0:05:38.920 --> 0:05:41.560 step and the second step clear and I'm sure we'll 0:05:41.600 --> 0:05:46.840 discuss this, is to have regulators in the US and 0:05:46.920 --> 0:05:52.560 around the world adopting the right policies that differentiates these products, 0:05:52.640 --> 0:05:58.480 that cigarettes, recognizing the absence of combustion and the lower toxicity, 0:05:58.560 --> 0:06:02.320 so the potential benefit to public health, so that we encourage, 0:06:03.080 --> 0:06:06.760 through commercial activities on side, the regulatory frameworks on the 0:06:06.800 --> 0:06:10.120 other side, smokers to switch. And if we do that properly, 0:06:10.320 --> 0:06:13.640 I think we can phase out cigarettes very fast. Now, 0:06:13.680 --> 0:06:15.320 what do you say when people say, you know, until 0:06:15.360 --> 0:06:18.800 you've got longitudal studies twenty three or thirty years of data, 0:06:19.120 --> 0:06:21.719 it's all bullshit. I mean that we don't really know 0:06:21.760 --> 0:06:23.480 what these things are going to do to people twenty 0:06:23.480 --> 0:06:25.960 thirty years from now. So let's just hold your horses 0:06:26.000 --> 0:06:28.120 and let's you know, hold back and making a big 0:06:28.160 --> 0:06:32.679 switch into the non combustibles. What's your response to them, Well, 0:06:33.680 --> 0:06:37.880 my response is that every day we lose in letting 0:06:37.920 --> 0:06:41.680 people having as an alternative only to continue smoking or 0:06:41.760 --> 0:06:45.880 quitting is a lost day in public health. The second 0:06:45.920 --> 0:06:52.400 thing is that all the precursors to what you call 0:06:52.600 --> 0:06:56.880 epidemiological studies or long term studies is pretty clinical and 0:06:56.960 --> 0:06:59.920 short term clinical studies, and if you have very substantial 0:07:00.000 --> 0:07:04.359 reduction in exposure two toxicans, is very natural to assume 0:07:04.440 --> 0:07:09.120 you will have reduction in disease caused by these toxicons 0:07:09.120 --> 0:07:12.760 because the toxicans are known. If we do nothing, nobody 0:07:12.800 --> 0:07:16.040 will adopt this product. And you know that the subject 0:07:16.080 --> 0:07:19.840 is a bit complex, but it's not different from essentially 0:07:20.640 --> 0:07:24.600 trying to convince consumers to move from using fossive fuels 0:07:24.680 --> 0:07:28.200 to renewable energy. It's not that the renewable energies are 0:07:28.240 --> 0:07:31.440 proven to have zero impact on the environment. Actually they don't. 0:07:32.040 --> 0:07:35.840 They're must be better than vernicle or fossil fuels. And 0:07:36.000 --> 0:07:40.800 we do both the you know, the products and the 0:07:40.880 --> 0:07:46.440 regulatory measures to convince people who consume energy to switch 0:07:46.480 --> 0:07:50.720 to this alternative. So we're trying to apply an extreme 0:07:50.760 --> 0:07:56.720 precautionary principle here, but clearly there are also legitimate concerns. 0:07:57.280 --> 0:08:02.760 There are legitimate concerns that we need to minimize impact 0:08:03.000 --> 0:08:08.400 in undesirable audiences, particularly youth. Also people that have quit 0:08:08.520 --> 0:08:12.240 and because these products are better than cigarettes, maybe they 0:08:12.240 --> 0:08:16.160 will come back. That's why the regulatory framework has to 0:08:16.240 --> 0:08:19.920 be fair district on how you commercialize this product at 0:08:19.920 --> 0:08:23.600 all that is physible. This is not a reason not 0:08:23.680 --> 0:08:26.280 to allow these products on the markets and then deprived 0:08:27.000 --> 0:08:30.760 smokers forever from these products because they have their right 0:08:30.800 --> 0:08:34.840 also to be informed that these products exists what they are, 0:08:35.000 --> 0:08:38.640 but they are not because they still contain ecotiner addictives. 0:08:38.640 --> 0:08:41.600 They're not zero risks, but they're much better than cigarettes 0:08:41.640 --> 0:08:44.880 for the ones who would like to continue using nicotine products. 0:08:44.920 --> 0:08:46.600 Now people will come back and say, well, why don't 0:08:46.600 --> 0:08:49.920 you just get out of the damned cigarette industry entirely? 0:08:50.040 --> 0:08:52.559 Like when it comes to the rest of the industry, 0:08:52.679 --> 0:08:55.120 do you guys talk with or another? Do you talk 0:08:55.200 --> 0:08:58.600 to their CEOs or chairs? Do you guys lead? Are 0:08:58.640 --> 0:09:01.000 they just looking if you get too far out of 0:09:01.040 --> 0:09:03.280 head on shifting a harmyduction just to scoop up your 0:09:03.320 --> 0:09:06.080 market share? Uh? You know, are you better than all 0:09:06.120 --> 0:09:08.760 the other guys? You know, I mean British, American Tobacco, 0:09:08.840 --> 0:09:12.560 Japan Tobacco, Imperial, all those. What's the nature of industry 0:09:12.600 --> 0:09:15.320 at at at the executive the top level in terms 0:09:15.360 --> 0:09:19.680 of the movement of harmy option. Okay, clearly we have 0:09:19.840 --> 0:09:25.400 been leading in this domain for various reasons. Other companies 0:09:25.679 --> 0:09:31.360 in the industry where slower in entering this domain, and 0:09:31.480 --> 0:09:36.520 we can examine why. But the thing is, once these 0:09:36.559 --> 0:09:42.280 products start being available to consumers and consumers starts reaching 0:09:42.320 --> 0:09:45.640 to them, I don't think there is an option from 0:09:45.640 --> 0:09:50.560 a pure competitive point of view for other manufacturers not 0:09:50.679 --> 0:09:55.600 to enter the domain now to do these products. If 0:09:55.640 --> 0:09:58.440 you start today, you're not going to have a product tomorrow. 0:09:58.880 --> 0:10:02.240 It takes years to develop the products, and once you 0:10:02.320 --> 0:10:05.200 have a developed product, you believe it's just the ability 0:10:05.240 --> 0:10:07.719 to switch consumers. Then you need to do all your 0:10:07.800 --> 0:10:11.880 quick clinically clinical trials, and then after that you need 0:10:11.960 --> 0:10:16.000 to do the right market surveillance to avoid unintended audiences, 0:10:16.080 --> 0:10:19.280 but long term established epidemiology as well. So it's a 0:10:19.320 --> 0:10:23.800 big investment to make and it takes multiple years. We 0:10:23.960 --> 0:10:27.520 talk or as it took, maybe we're slow, but it 0:10:27.559 --> 0:10:30.920 took us six seven years to develop the first heated 0:10:30.960 --> 0:10:33.920 tobacco product and another three or four years to do 0:10:34.000 --> 0:10:37.160 the substantiation. So it's a ten year investment of multi 0:10:37.200 --> 0:10:41.600 billion dollars. Because these products because they have lower taxes 0:10:42.040 --> 0:10:46.839 and that's part of the regulatory UH framework, they also 0:10:46.880 --> 0:10:50.760 have higher margins that justify your investments. Then once we 0:10:50.880 --> 0:10:54.600 reach a sufficient critical massive smokers that have switched to 0:10:54.640 --> 0:10:59.880 these products, then do side measures or other regulatory interveneurs 0:11:00.080 --> 0:11:03.040 like up and trade or nicotine reduction as the Fday 0:11:03.080 --> 0:11:09.000 is discussing. So you've kind of further incentivize consumers to switch, 0:11:09.160 --> 0:11:12.720 but also manufacturers on a stick and currot base to 0:11:13.280 --> 0:11:17.440 start investing now because you know in ten years, fifteen years, 0:11:17.440 --> 0:11:20.040 the measures are going to be so drastic on the 0:11:20.040 --> 0:11:23.520 people that have not invested in these new products that 0:11:23.679 --> 0:11:27.280 it will be not sustainable from a business perspective. And 0:11:27.320 --> 0:11:30.880 what is important, sorry if I sound like a broken record, 0:11:31.360 --> 0:11:36.680 is that public health authorities and governments get aligned behind 0:11:36.720 --> 0:11:40.320 Haart reduction. Because if you're a manufacturer and you have 0:11:40.480 --> 0:11:44.640 very ambiguous views in your country about what this products 0:11:44.640 --> 0:11:48.440 should be authorized or not. In some countries they banned 0:11:48.720 --> 0:11:51.320 vapor products. In some countries they banned both in vapor 0:11:51.440 --> 0:11:55.800 products and heated tobacco products as precautionary principle, So that 0:11:55.840 --> 0:12:01.600 doesn't incentivize manufacturers around the world to invest heavily in 0:12:01.640 --> 0:12:06.200 this product. So having the governments and public health being 0:12:06.240 --> 0:12:08.760 aligned that yes, the best thing is to quit, but 0:12:08.920 --> 0:12:12.920 if you don't quit. Then the second best is to 0:12:13.040 --> 0:12:16.520 move to this products and create the right incentive. Says 0:12:16.600 --> 0:12:19.600 that stick and current. Yeah, sometimes get this sense and 0:12:19.640 --> 0:12:21.760 they tell me if it's wrong or not. That in 0:12:21.800 --> 0:12:24.520 the countries that are good on harm reduction, like the 0:12:24.600 --> 0:12:28.480 United Kingdom or maybe New Zealand, that in those countries, 0:12:28.800 --> 0:12:31.600 you know, you p M. I are willing to kind 0:12:31.600 --> 0:12:35.480 of really you know, be very non aggressive with selling 0:12:35.520 --> 0:12:38.280 your cigarettes, really to pull back and you know, not 0:12:38.360 --> 0:12:40.480 do anything that people would I mean they don't like 0:12:40.520 --> 0:12:41.959 you selling in the first place, but that you're not 0:12:42.000 --> 0:12:44.480 going to push it hard. Where's a country like Mexico 0:12:44.760 --> 0:12:48.400 which is banning basically all the harm reduction products, or 0:12:48.440 --> 0:12:51.679 certainly east cigarettes and heat not burn things. You know, 0:12:51.720 --> 0:12:53.959 it seems like you're more so I saw. I think 0:12:54.000 --> 0:12:56.880 you've got a letter from some of the harm reduction 0:12:57.040 --> 0:12:59.040 supportive scientists saying, you know, what do you do with 0:12:59.080 --> 0:13:01.920 Marlborough shuffle? There's a Marble shuffle. Some product you have 0:13:02.000 --> 0:13:05.800 in Mexico is a marketing campaign, especially attractive to young people. 0:13:05.880 --> 0:13:09.280 It's got these capsule things. It's actually to try different flavors. 0:13:09.559 --> 0:13:11.760 I mean, is there that sense that if a government 0:13:11.840 --> 0:13:13.800 is going to shut you out on harmonduction. You're just 0:13:13.840 --> 0:13:16.240 gonna be a little more of a bad boy when 0:13:16.240 --> 0:13:21.520 it comes to marketing cigarettes. Absolutely not. Uh. First of all, 0:13:21.760 --> 0:13:28.400 just to give a little bit of perspective here, um today, 0:13:28.520 --> 0:13:33.360 in the markets where we are present with this product, okay, 0:13:33.480 --> 0:13:36.160 or we can be present, and if you look at 0:13:36.200 --> 0:13:39.840 pre mind total, more than eighty percent of our commercial 0:13:39.840 --> 0:13:43.480 money marketing sales forces go behind this products, although we 0:13:43.559 --> 0:13:47.319 still represent a fraction of the pond, okay, So we 0:13:47.440 --> 0:13:51.880 put our money to our mouths. Secondly, uh, you know, 0:13:53.800 --> 0:13:58.000 it's not that if you are aggressive in marketing certain products, 0:13:58.080 --> 0:14:02.840 it's kind of retaliation with every governments, okay, becauseural governments 0:14:02.840 --> 0:14:06.240 don't care about these things. The second thing is in 0:14:06.559 --> 0:14:10.680 certain markets where I mean Mexico essentially banned the importable 0:14:10.720 --> 0:14:14.800 these products, okay, So the only thing is to continue 0:14:14.800 --> 0:14:17.080 the dialogue with the government to convince them that that 0:14:17.240 --> 0:14:22.400 was not the brightest idea they had. Okay. And on 0:14:22.440 --> 0:14:25.240 the other side, you need to do a minimum in 0:14:25.280 --> 0:14:29.560 the cigarette market where you have nothing else in order 0:14:29.640 --> 0:14:32.000 to maintain at least your market share. That where you're 0:14:32.040 --> 0:14:36.160 just from a shareholder's perspective, you move your market share 0:14:36.200 --> 0:14:39.640 to competitors. But we are not investing behind cigarettes, okay. 0:14:40.400 --> 0:14:47.160 And whenever a market is makes it possible for us 0:14:47.240 --> 0:14:51.160 to commercialize these products, we do commercialize, Okay. I would 0:14:51.240 --> 0:14:57.560 love Indonesia to finally adapt all the regulations necessary. Philippines 0:14:57.560 --> 0:15:00.040 were moving in the right direction and we started I 0:15:00.080 --> 0:15:03.600 link this products there, and I hope you mentioned in Mexico. 0:15:04.080 --> 0:15:07.120 You know, people in Mexico will see the opportunity in 0:15:07.200 --> 0:15:09.720 the government and take the right measures other than banning 0:15:09.800 --> 0:15:13.080 the products and condemning people to only smoke. But there 0:15:13.160 --> 0:15:16.280 is no we pro void the two okay, So let 0:15:16.280 --> 0:15:17.960 me press you harder. I mean, then we'll get more 0:15:18.000 --> 0:15:19.880 into the harmony duction stuff. And some of the other 0:15:19.920 --> 0:15:22.640 skeptics will say so when it comes to, for example, 0:15:22.720 --> 0:15:26.280 bands and tobacco advertising, that there was recently a referendum 0:15:26.320 --> 0:15:28.840 in Switzerland right where you live, you know, and I 0:15:28.880 --> 0:15:32.000 think that P might other companies opposed the Swiss referendum 0:15:32.040 --> 0:15:36.240 to ban virtually all tobacco advertising. Now was that because 0:15:36.280 --> 0:15:39.800 it was also a ban on noncombustibles or what was 0:15:39.880 --> 0:15:43.360 your why were we doing that? Correct? Not applies in 0:15:43.440 --> 0:15:48.520 general you know to all institutions, mightly to them is 0:15:48.560 --> 0:15:56.479 to follow different shade noncombustible products from combustible products, okay, 0:15:56.600 --> 0:16:01.560 or scientifically proven reduced risk products, let's call them. And 0:16:01.600 --> 0:16:04.000 then you can do whatever you want with cigarettes. In 0:16:04.040 --> 0:16:06.480 any case, in many countries, that is not much more 0:16:07.320 --> 0:16:13.560 that is available. Two you know prohibit So the reality 0:16:13.680 --> 0:16:16.920 is on cigarettes. You know, as I said, be my 0:16:17.000 --> 0:16:20.640 guests and do whatever they want. Right. But but but you're 0:16:20.680 --> 0:16:22.800 saying p m I. Now when it comes to you know, 0:16:22.880 --> 0:16:26.480 if governments want to increase taxes on cigarettes, bean advertising, 0:16:26.560 --> 0:16:28.640 limit where you can take it. At this point, p 0:16:28.840 --> 0:16:31.680 m I is not opposing those types of things anywhere, 0:16:31.920 --> 0:16:34.200 so long as it's focused on cigarettes and not on 0:16:34.240 --> 0:16:37.920 the noncombustibles. Is that right. Let's let's take one after that. 0:16:38.960 --> 0:16:41.840 When you talk about tobacco products or even words all 0:16:41.960 --> 0:16:44.800 nicotine products, and you apply all the same rules to 0:16:44.920 --> 0:16:49.960 all this products, then clearly your favorite cigarettes. Because the 0:16:50.000 --> 0:16:55.960 new categories various degrees are relatively unknown smoke, so you 0:16:56.040 --> 0:16:59.920 need some differentiating factors so you can explain to consumers 0:17:00.040 --> 0:17:03.280 what these products are. I'm not saying TV advertising or 0:17:03.400 --> 0:17:06.720 radio advertising or things like this, but the ability to 0:17:06.800 --> 0:17:12.160 contact people, the ability to them to try this product, 0:17:12.240 --> 0:17:14.720 I mean you have countries where you cannot offer a 0:17:14.720 --> 0:17:19.560 consumer the possibility to try a smoke free product by law. 0:17:19.760 --> 0:17:22.560 So how how is a smoker going to try this 0:17:22.640 --> 0:17:24.879 product and spend money to buy it if they can 0:17:24.960 --> 0:17:31.840 try it. So it's the minimum necessary to communicate with consumers. 0:17:32.359 --> 0:17:36.160 The second thing is you do need differentiated taxation between 0:17:36.480 --> 0:17:40.840 the two categories, because one is easy to market, is 0:17:40.960 --> 0:17:45.200 very well known. The other requires, as I said previously, 0:17:45.560 --> 0:17:51.320 a very significant investment in product development and scientific assessment 0:17:51.359 --> 0:17:55.760 priclin clinical. So we don't have the same spend by 0:17:55.800 --> 0:17:59.320 any measure between the two. I mean, if you want 0:17:59.359 --> 0:18:02.400 to create any cigarette, you just maximum you will do 0:18:02.440 --> 0:18:05.439 is adapt the geometry of the packaging and you have 0:18:05.480 --> 0:18:08.240 a new product in six months, and the others have 0:18:08.359 --> 0:18:12.879 horizons of four to eight years. So this has to 0:18:12.920 --> 0:18:18.240 be recognized. In terms of taxation. We've always said governments 0:18:18.280 --> 0:18:23.879 always increase excess taxes, and they will continue increasing both 0:18:23.880 --> 0:18:27.359 form for revenue reasons but also as a measure to 0:18:28.560 --> 0:18:32.159 diminished consumption. So they can increase. Always say don't do 0:18:32.200 --> 0:18:35.400 abrupt to one nots, have a plan and increase every 0:18:35.480 --> 0:18:37.679 year by the amount you want, and then this is 0:18:37.720 --> 0:18:40.040 perfect Okay, we know what's happening. If you have one 0:18:40.080 --> 0:18:43.080 of you have contraband, and then the legitimate sales go 0:18:43.160 --> 0:18:47.000 down and illegal products get the market. But what is 0:18:47.040 --> 0:18:50.639 more important is that they keep some differentiation between the 0:18:50.680 --> 0:18:54.480 smoke free category and the smoking right collects because the 0:18:54.560 --> 0:18:57.120 same thing we do for electric cars, they pay less 0:18:57.160 --> 0:18:59.920 taxes and so on. So I understand we're saying something 0:19:00.000 --> 0:19:02.680 that is unreasonable. Yeah, you know it makes sense. Let 0:19:02.680 --> 0:19:05.159 me ask you, what's your thoughts on these menthol bands 0:19:05.200 --> 0:19:08.159 or I think European Union did it? The US did it? 0:19:08.520 --> 0:19:10.479 Used to work? I think you first started working with 0:19:10.600 --> 0:19:12.920 p m I in Poland. Poland's one of the biggest 0:19:12.920 --> 0:19:16.320 consumers of mental aid in cigarettes. Are they a good idea? 0:19:17.000 --> 0:19:19.640 What do you think? Okay? First of all, the European 0:19:19.720 --> 0:19:23.520 Union did the band mental in cigarettes. The US has 0:19:23.560 --> 0:19:27.840 not yet bunned. Okay, so that's the first thing. Yes, 0:19:27.880 --> 0:19:32.280 I'm supporting the measure as a measure that when we 0:19:32.359 --> 0:19:36.720 have good availability of vapor product, executed tobacco products or pouches, 0:19:37.280 --> 0:19:41.760 that's a nice way to push consumers of menthol into 0:19:41.800 --> 0:19:44.960 the new categories. Just happen in the right time, Okay, 0:19:45.040 --> 0:19:51.280 I'll try bunning menthol without having smoke free alternatives. Essentially, 0:19:51.520 --> 0:19:54.920 what happened in the European Union is that the most 0:19:54.960 --> 0:19:59.160 smokers reached to normal cigarettes, I mean to non mental cigarettes. Okay, 0:19:59.480 --> 0:20:03.080 class you see some people buying mental and mental lating 0:20:03.119 --> 0:20:06.400 their packs because it's very easy. So I don't think 0:20:06.480 --> 0:20:11.080 we had the effect that we wanted to have, and 0:20:11.240 --> 0:20:13.760 we would have much better effect if it happened the 0:20:13.800 --> 0:20:17.000 way you describe, if alternatives were on the market, and 0:20:17.040 --> 0:20:19.200 then you give a very good chance to these new 0:20:19.240 --> 0:20:24.120 products to be adopted. But people didn't really quit. We'll 0:20:24.160 --> 0:20:41.240 be talking more after we hear this add Now, there's 0:20:41.280 --> 0:20:43.399 this other proposal that's been put for in the US 0:20:43.480 --> 0:20:47.440 in June of this year to basically reduce the level 0:20:47.520 --> 0:20:50.920 of nicotine and cigarettes to the point where they're almost 0:20:50.920 --> 0:20:53.440 not cigarettes anymore, and there's not cutting it by half. 0:20:53.480 --> 0:20:57.680 By cutting it by and the estimatest would save millions 0:20:57.680 --> 0:21:00.800 of lives. My senses, it might actually be the movement 0:21:00.800 --> 0:21:04.080 where we switched to a defective tobacco prohibition and launch 0:21:04.160 --> 0:21:07.520 cigarettes into the big leagues of major global drug trafficking. 0:21:07.760 --> 0:21:10.360 But what's your views on this reduced nicotine thing. Will 0:21:10.359 --> 0:21:13.119 there ever be a moment where this makes sense to 0:21:13.200 --> 0:21:16.040 do or is that just pushing on the supply side 0:21:16.080 --> 0:21:19.920 controls too far. The supply side controls, as I said, 0:21:20.080 --> 0:21:24.320 is measures you can take when you have good availability 0:21:24.359 --> 0:21:28.680 of alternatives to avoid what you just describe sitrate self 0:21:28.760 --> 0:21:34.639 nipotinization and so on. Okay, so people spike their cigarettes 0:21:34.680 --> 0:21:38.440 that have no nipotine with nicotine and so on. I 0:21:38.480 --> 0:21:42.560 think this has to be seen in the US in 0:21:42.640 --> 0:21:45.760 the context of the policy announced a few years ago 0:21:46.960 --> 0:21:50.360 by the Commissioner and reaches a lot of the head 0:21:50.359 --> 0:21:56.960 of tobacco in the FDA that they saw and dual strategy. 0:21:57.080 --> 0:22:01.560 The one is on one side, we may alternatives available 0:22:02.080 --> 0:22:07.399 that are scientifically proven and authorized, and on the other side, 0:22:07.440 --> 0:22:11.800 in the right moment, we reduced nicotine in cigarettes as 0:22:11.840 --> 0:22:14.320 a measure. It's not the only one, but that's the 0:22:14.359 --> 0:22:17.600 only one the FDA has under control. Now. If we 0:22:17.760 --> 0:22:21.760 talk about cup and trade and other measures of this nature, 0:22:21.920 --> 0:22:27.119 probably they are more effective. But the principle of allowing 0:22:27.160 --> 0:22:30.320 alternatives and then do the right regulatory measures at a 0:22:30.359 --> 0:22:35.760 certain stage to accelerate the phase out are rational regulations. 0:22:36.520 --> 0:22:38.760 The danger in general will take one side of the 0:22:38.800 --> 0:22:44.159 regulation and we forget the other. Okay. So to me, 0:22:44.520 --> 0:22:47.800 this is a measure that is a stick and currot measure. 0:22:47.840 --> 0:22:51.320 It's a phase out measure, and it has to be 0:22:51.400 --> 0:22:56.320 seen with other possible measures and not on its own, Okay. 0:22:56.359 --> 0:23:00.800 But the principle, I think it's clear from abiating myself, 0:23:01.200 --> 0:23:04.280 you need availability of this product, you need the right framework, 0:23:04.320 --> 0:23:07.600 and then eventually the phase out measures at the right moment, 0:23:07.720 --> 0:23:10.280 and that I'm fully supported. You know, part of this 0:23:10.520 --> 0:23:14.200 bi monthly conference call with a lot of the leading 0:23:14.240 --> 0:23:18.119 tobacco control experts who are sympathetic to harmonaduct share, and 0:23:18.160 --> 0:23:20.600 it's fair to say, you know, none of them fully 0:23:20.720 --> 0:23:24.600 trust you p m I. Big tobacco people vary in 0:23:24.640 --> 0:23:28.720 these things, but the one issue everybody's on is, you know, 0:23:29.080 --> 0:23:31.840 p m I is out there claiming that there's twelve 0:23:31.880 --> 0:23:34.679 and a half million adult smokers who have switched completely 0:23:34.720 --> 0:23:38.640 to icos from cigarettes and stopped smoking, not counting Russian Ukraine, 0:23:38.640 --> 0:23:41.560 so even more than that, And the question is how 0:23:41.600 --> 0:23:44.679 do you know? And they're asking you for data. You know, 0:23:44.720 --> 0:23:46.760 they say, if you're claiming what your market share is 0:23:46.760 --> 0:23:49.080 with icos and all this, there must be data, and 0:23:49.119 --> 0:23:52.320 you're not being transparent. You're not handing over the information. 0:23:52.400 --> 0:23:55.280 You're sending your people to meet with them, and you're saying, yes, 0:23:55.320 --> 0:23:57.960 we understand, blah blah blah blah blah, but that basically 0:23:57.960 --> 0:24:01.000 you're holding back on providing the formation that can really 0:24:01.040 --> 0:24:05.160 substantiate what you claim to be the powerful substitution effects 0:24:05.200 --> 0:24:08.440 for icons for people switching. So why why are you 0:24:08.520 --> 0:24:12.080 holding back? Why not be as totally transparent as possible 0:24:12.080 --> 0:24:16.359 in this stuffs of all we want to be transparent. Okay. 0:24:16.560 --> 0:24:23.879 The thing is, icons and vapor products are rather recent phenomenon. Okay, 0:24:23.920 --> 0:24:27.520 So in the cigarette market you have fluctuations over the 0:24:27.600 --> 0:24:31.840 last three years that are fairly big. You had covid 0:24:32.200 --> 0:24:34.960 or in some countries, you increase consumption the US, In 0:24:35.000 --> 0:24:39.080 some countries you had a decreasing consumption of cigarettes. In 0:24:39.160 --> 0:24:43.720 some countries you still have icons and vapor being a 0:24:43.760 --> 0:24:47.480 small part of the market five six p so, and 0:24:47.560 --> 0:24:51.240 you have price changes and touch change. So the data 0:24:51.320 --> 0:24:54.639 needs to be cleaned up from all this in order 0:24:55.040 --> 0:25:00.520 to be available to scientists to study, and the only 0:25:00.520 --> 0:25:02.639 way to do that is to have the right scientists 0:25:02.640 --> 0:25:06.680 with you. So you explain all the other influence in phenomena. Okay, 0:25:07.040 --> 0:25:09.920 it's a fact that we know from all the consumer 0:25:10.040 --> 0:25:12.679 surveys we're doing. We're gonna make available all the panel 0:25:12.800 --> 0:25:17.640 data that people who switched to icos. You know, if 0:25:17.800 --> 0:25:20.640 out of hundred people switch to who buy icos, I'm 0:25:20.680 --> 0:25:28.840 sorry about stay with icos and sixty problem with sevents 0:25:28.880 --> 0:25:31.840 which completely to and that you have the follow up 0:25:31.880 --> 0:25:33.760 of the consumers, you can say it's a bit bias 0:25:33.920 --> 0:25:38.119 data by the panel and that's a fact. On the 0:25:38.119 --> 0:25:43.439 other side, as the Icons in particular share is building up, 0:25:43.480 --> 0:25:46.200 clearly the data will become more visible. It's very visible. 0:25:46.240 --> 0:25:49.439 In Japan the category is at almost thirty percent of 0:25:49.440 --> 0:25:52.720 the market, so it's very visible. I think the visible 0:25:52.800 --> 0:25:57.520 cigarette sales as exactly. So you do you start seeing 0:25:57.520 --> 0:25:59.639 in Italy another market, So I think it's a question 0:25:59.680 --> 0:26:02.440 of time. But there's not a lack of transparency. The 0:26:02.520 --> 0:26:04.720 data is there. But if we make the effort to 0:26:04.760 --> 0:26:09.080