Vaping, contraband and bill S-5: Rare interview with CEO of Imperial Tobacco

At an iPolitics Live event in Ottawa on Monday morning, iPolitics publisher and editor-in-chief, James Baxter, sat down for a one-on-one conversation with Jorge Araya, President and CEO of Imperial Tobacco, regarding an industry that is traditionally reluctant to speak out on issues.

“The industry acknowledges that we’re a very contentious industry, and I’m not here to defend the industry,” said Araya. “The jury is no longer out regarding the health risk. Smoking is the cause of serious and fatal diseases. This is why we’re moving beyond tobacco.”

Araya said that the industry wants to move to less risky products, but for that to happen, they need assistance from governments in order help move people toward these newer products, which can mean reducing barriers that would otherwise prevent adult smokers from moving to the “next generation” alternatives.

“We think it’s very important that we focus on balanced regulations that ensure that there is an informed choice for adult consumers, protect youth, and discourage them from the black market,” said Araya. “After all, cigarettes are legal products.”

Araya notes that their American parent company generates $50 billion in taxes for governments per year, and that within Canada, Imperial Tobacco Canada generated $4 billion in taxes. There are an estimated 5 million smokers in Canada, while the illegal tobacco industry is estimated to be a billion-dollar industry involving 175 organized criminal groups.

Araya noted that what they oppose are tobacco control measures that are not supported by evidence, and that will have no impact on public health, singling out plain packaging rules as being counter-productive, which has not lowered smoking rates in countries where it has been implemented, like Australia, and which increased the illegal cigarette trade in that country by 25 percent over two years.

Araya said that they support the government’s bill to create a legal framework for vaping products, but are concerned that it would prohibit them as being marketed as a harm reduction tool for smoking cessation, despite a wealth of research data that has shown them to be less risky to public health.

photo courtesy of Twitter

In response to questions, Araya said that their move toward less harmful products is consumer-driven, and that it is their belief that offering a range of products, it can incentivize the migration of current smokers to less harmful products.

“We believe in a transition, and this can go as fast as legislation permits,” said Araya. “The more open the market, the more capacity we have to convey the right message about these next-generation products, the faster the transition to these less harmful products.”

Araya also noted that with impending marijuana legalization, that the tobacco industry is asking for a consistency of treatment, given that prohibition, high taxes and plain packaging all don’t work. Otherwise, they have no interest in getting into the cannabis market.

He also noted that they are being transparent about where their research dollars are going, in the hopes that they can regain their credibility around harm reduction. The move toward less harmful products has been as a result of a decade’s worth of research, in which has been ensured that there have been products that are available. For example, with e-cigarettes, there is research data that shows it is a useful tool in smoking cessation, and that it reduces upwards of 90 percent of the harmful effects of traditionally combustible tobacco.

“As long as the free market is science-based, we are happy to compete,” said Araya.