Associate Health Minister Casey Costello and Prime Minister Christopher Luxon appear to be at odds over whether tobacco giant Philip Morris stands to benefit financially from a tax break for a heated tobacco product the company has a monopoly on.
It comes as Costello today released five documents her office said she gleaned independent advice on the topic from.
Yesterday, it was revealed Costello’s plan to move people from smoking cigarettes to Heated Tobacco Products (HTPs) was stymied after the only device available in the New Zealand market became non-compliant due to regulations to vaping devices.
The regulations meant vaping devices must have removable batteries and childproof locks.
Associate Health Minister Casey Costello was blindsided. (Source: 1News)
While the device is not for vaping – which does not use tobacco – the regulations capture HTP devices, meaning the planned tax break became mostly ineffective on October 1, when the regulation enforcement began.
Costello yesterday told 1News she “wasn’t aware” the heated tobacco devices wouldn’t be compliant with the October 1 regulation changes but said “the market pivots pretty quickly”.
Today, Luxon said while he was not a vaper nor smoker and was not familiar with the products, he was “well aware that we’re childproofing alternatives to smoking”.
Asked if he was aware that was coming into place on October 1, having discussed the products and the trial tax break on TVNZ’s Breakfast on Tuesday, he said “yeah, because we extended it six months”.
The regulations’ enforcement had been delayed for six months by Cabinet from its original start date of March 21 this year.
Luxon was also asked if he accepted the tax cut on HTPs benefited Philip Morris, but said: “No, I disagree”.
This was also at odds with Costello’s comment yesterday that “the policy around an excise tax reduction may have benefited them, absolutely”.
‘Independent advice’ relied on by Minister released
The Minister’s office released five documents as the “independent advice” she’d received on HTPs late this afternoon, following repeated requests.
A further document 1News understands was relied on by Costello as “independent” advice on the products is linked to tobacco company Philip Morris.
The study, What Is Accounting for the Rapid Decline in Cigarette Sales in Japan? relies on data from the Tobacco Institute of Japan and Philip Morris International.
The Tobacco Institute of Japan was set up in 1987 – its founding members include Japan Tobacco and Philip Morris.
The study itself states there should be scepticism around any claims from tobacco companies.
Among the five documents released, one – “A Decision-Theoretic Public Health Framework for Heated Tobacco and Nicotine Vaping Products” – included cited sources where all authors worked for Philip Morris.
“Patterns of Smoking and Snus Use in Sweden: Implications for Public Health” looks at the relationships between snus use and smoking in Sweden.
It doesn’t mention heated tobacco products – although like snus, tobacco consumed in an HTP is a smokeless tobacco product.
A 2016 study – “Nicotine without smoke: Tobacco harm reduction” by the UK Royal College of Physicians – focuses on non-tobacco nicotine products, such as e-cigarettes. It stated it’s important to carefully consider the role of nicotine products in smoking cessation to maximise their benefit for that purpose.
It notes that the supply of smokeless tobacco is constrained in the UK due to local law in place since 1992, and that the use of nicotine products – including vaping and HTP use – are considered by some to be a “gateway” to smoking cigarettes.
It also said that an analysis of British American Tobacco corporate documents between 2001 and 2009 found no substantive evidence the company encouraged smokers to switch permanently to smokeless tobacco, but rather indicated there were “defensive investments” in smokeless tobacco products – snus – aimed at protecting the “status quo and the dominance of the cigarette” in Sweden.
Treasury advice warns tax break for HTPs could see people abandon less harmful alternatives
Recently released Treasury advice to the Minister also showed officials told Costello there was “no clear independent evidence that HTPs are significantly less harmful than cigarettes”.
“Industry claims that because the tobacco is heated rather than burned, HTPs are less harmful.”
It also stated that there was emerging research suggesting HTPs “still produce toxic emissions similar to those in cigarette smoke” and exposed users to some toxicants specific to the products, which could also be exposed to bystanders.
“Conversely, removing excise tax from heated tobacco products might see nicotine consumers move away from vaping, which evidence suggests is far less harmful compared to tobacco-based products. The impacts of this are especially unclear for Māori, Pacific, disabled, and youth communities.
“HTPs in New Zealand are supplied by a single provider. They sell a range of heated tobacco sticks and the related ’IQOS’ devices … alternative suppliers of heated tobacco products exist, most notably JTI (Japan Tobacco International) who have a product called PLOOM. This is not currently available in New Zealand.”
