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** 14 February 2022
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** UK
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** Over a quarter of smoking households in East of England are living in poverty (#1)
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** Big Tobacco struggles to convince investors it can quit cigarettes (#2)
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** Vaping helps British American Tobacco fire up £2bn shares buyback (#3)
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** Opinion: Britain is trapped in no man's land while Tory MPs dither over ditching Boris Johnson (#4)
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** International
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** Swiss approve tobacco ad ban long after neighbours (#5)
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** UK
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** New analysis from Action on Smoking and Health (ASH) has found that over 100,000 smokers are living in poverty in the East of England. The data shows that 26% of households with smokers in the East of England live in poverty once spending on smoking is accounted for, just below the England average which stands at 31%. In addition, 24,169 people are economically inactive due to smoking and smokers earn 6.8% less than non-smokers in the East of England.

Andrew Reid, cabinet member for public health, public protection and communities, said: “Smoking is one of the largest preventable causes of inequalities both nationally and here in Suffolk. Suffolk County Council is committed to supporting residents to quit smoking and commissions a number of targeted interventions to support the most vulnerable to the health and financial risks of smoking, to quit for good. We are working with housing association partners on initiatives which will support those in social housing to quit smoking, as well as with health care partners to enable every smoker who is admitted to hospital to automatically receive support and medication to quit smoking."

Deborah Arnott, chief executive of ASH, said: “Smoking is the single largest driver of health inequalities in England and it is shocking that it’s contributing to more than two million adults living in poverty, concentrated in the most disadvantaged regions in the country. Behind every statistic is a human being. A real person, threatened by the debilitating health effects of smoking, and significantly poorer because of an addiction that started in childhood. We look forward to the forthcoming Tobacco Control Plan to achieve the Government’s smoke-free 2030 ambition. This will play a key role in delivering the 2030 targets to narrow the gap in life expectancy, wellbeing and productivity between the top performing and other areas set out in the Levelling Up White Paper."
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Source: East Anglian Daily Times, 13 February 2022
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** Ian Johnston and Harriet Agnew of Financial Times say that despite increased returns from non-combustible products and large overall profits, investors are increasingly turning away from tobacco companies due to ethical concerns and a belief that big tobacco will not abandon cigarettes.

As PMI’s chief financial officer Emmanuel Babeau said in an interview this week, the reduced-risk business model relies on there being smokers to convert. When asked about a significant rise in cigarette sales to above pre-pandemic levels in the Middle East and north Africa last year, Babeau told the Financial Times: “Our ambition is to convert smokers to our [reduced-risk] product. If we lose the link to the smoker, we can’t convert them easily to the product.”

However, whilst some investors are happy to continue backing Big Tobacco, one top-10 shareholder in Imperial Tobacco said: “The problem is that tobacco is almost becoming uninvestable. A lot of investors are weighing up excluding it from their portfolio.” Almost 70% of US large-cap equity managers had jettisoned tobacco from their portfolios by June 2018, with little impact on performance, according to a 2019 study by Seattle-based asset manager Russell Investments.

Johnston and Agnew argue that “tobacco companies ultimately want to be considered sustainable investment prospects”. BAT now reports that 12% of its revenues come from non-combustible products, behind PMI and ahead of Imperial where that figure is 3.5%. However, many investors remain sceptical. Another top-10 shareholder in BAT said, “I don’t think tobacco stocks will ever have a place in ESG [Environmental, Social, and Governance] or sustainable products — this would represent too much of a shift”, whilst Sébastien Thevoux-Chabuel, head of responsible investment at French asset manager Comgest, added: “The transformation . . . needed is so gigantic and so risky that we wouldn’t be able to get conviction on the stocks to invest in the tobacco sector, even if the companies transition to reduced-risk portfolios.”

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** Source: Financial Times, 12 February 2022
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** British American Tobacco (BAT) is to make a share buyback of as much as £2 billion after it reduced losses in its e-cigarette business for the first time last year and continues to make vast profits in its overall business. In its full-year results published on Friday 10 February, BAT said that expected returns of about £40bn in free cashflow over the next five years meant that it could approve the share repurchase programme this year and could increase its dividend by 1% to 218.8p per share.

BAT’s revenue rose by 6.9% to £25.7 billion last year, on an adjusted basis and at constant currency level, with sales from new categories of products including Vuse e-cigarettes and glo heat-not-burn brands rising by 50.9% to more than £2 billion. BAT gained around 4.8 million new non-combustible product customers, taking the total to 18.3 million, and losses in new categories fell by about 9%. Non-combustible products now account for 12% of revenues, up from 4% in 2017. With losses from new categories having peaked, they remain on course to turn a profit by 2025 and hit £5 billion in revenue. However, BAT still generates most of its money from cigarettes, with cigarette volumes “broadly flat” compared with 2020, standing at 637 billion cigarette sticks sold worldwide.

BAT sold its operations in Iran, costing the company £358 million, and chief executive Jack Bowles would not say whether this was related to BAT’s disclosure about two years ago that the US Department of Justice and the Office of Foreign Assets Control, was investigating BAT for “suspicions of breach of sanctions” related to an unspecified country or countries.

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** Source: The Times, 11 February 2022
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** The Guardian political commentator Andrew Rawnsley argues that by waiting to decide whether to act on Prime Minister Boris Johnson’s future, Tory MPs are putting the national interest at risk. Rawnsley says that the Tory party and the Government is currently “marooned in no man’s land” as MPs will not take action to force a ballot on Boris Johnson’s future but also think that Johnson will not lead the party at the next general election. MPs are worried about the consequences for the party – a contaminated Tory brand, defeats for Tory councillors in local elections – but Rawnsley worries about the national interest.

Rawnsley says that Johnson is “solely focused on trying to save his own skin” and governs “one day to the next”. Rawnsley notes that “Government policy is not being designed with a regard to the national interest, or even being shaped around what might be popular with voters. Those involved with ‘Operation Save Big Dog’ admit that the only people who matter to Mr Johnson at the moment are Conservative MPs. Decision-making is entirely driven by his need to appease this Tory faction and placate that Tory groupuscule.”

While a small number of MPs have submitted letters of no confidence and made this publicly known and others have done so in secret, a substantial group of Tory MPs want Johnson gone, but are still hesitant to act. Rawnsley notes that MPs “privately say that they are holding back until they are more confident that they can cleanly eject him [Johnson] from Number 10. While it only takes 54 Tory MPs to compel a confidence vote, there is a larger and more important figure. That is 181, the minimum number of votes against him needed to ensure his defenestration.”

Rawnsley concludes that the Government will continue to be unable to act in the national interest until Tory MPs “cease equivocating and a critical mass of them decide to bring things to a head”.

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** Source: The Guardian, 13 February 2022
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** International
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** Swiss voters have approved a ban on tobacco advertising in any places a young people might see it. The Swiss public voted in a referendum on Sunday 13 February that will lead Switzerland to a complete ban, bringing it into line with its European neighbours, most of whom adopted bans on tobacco advertising years ago. In the end, 56% of voters backed the advertising ban.

Switzerland has delayed banning tobacco advertising until now after legislation for tighter restrictions was repeatedly rejected in parliament. The Swiss Government backed the ‘No’ vote in the referendum. Critics say that this is due to the presence of Big Tobacco in Switzerland, with Philip Morris, British American Tobacco, and Japan Tobacco all having their headquarters in Switzerland. The tobacco industry is estimated to contribute over $6bn (£4.5bn) and 11,000 jobs to the Swiss economy.

Tobacco companies had funded the ‘No’ campaign and argued that other foods judged to be harmful to health could follow the advertising ban, such as cakes and sausages. But voters rejected these arguments. "The people understood that health is more important than economic interests," said Stefanie de Borba, of the Swiss League against Cancer. Social Democrat MP Flavia Wasserfallen praised the doctors and teachers’ associations who campaigned for the ban.
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** Source: BBC News, 13 February 2022
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ASH Daily News is a digest of published news on smoking-related topics. ASH is not responsible for the content of external websites. ASH does not necessarily endorse the material contained in this bulletin.

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