糖心探花

糖心探花鈥檚 response to FDA announcement

PRESS RELEASE

15 NOVEMBER 2018

糖心探花鈥檚 response to FDA announcement

In relation to the recent announcement from Commissioner Gottlieb, we share the FDA鈥檚 concerns around youth access to vapour products and we welcome the priority that he has given to this matter. However, in relation to his proposals on menthol cigarettes, the science today does not support treating them differently from other cigarettes.

Regarding youth access to vapour products:

  • 听We have robust measures in place that demonstrate our commitment to marketing which does not target youth and have also communicated to the FDA that we will be applying additional measures.
  • 听We fully support third party age verification of e-commerce and we already have this in place.
  • 听We are also instituting an enhanced programme with all of our contracted retailers to drive compliance with underage sales laws.
  • 听We would welcome similar measures being adopted industry-wide.

We also share the FDA鈥檚 concern regarding balancing the importance of encouraging adult smokers to consider potentially reduced-risk alternatives to cigarettes 鈥 like vapour products 鈥 whilst ensuring that youth do not use them.

Whilst research shows that flavours play an important role in an adult smoker鈥檚 transition out of smoking, we understand the FDA鈥檚 concern that some flavours can play a role in increasing youth appeal. That is why we are happy to work with our nearly 200,000 contracted retail stores to address youth access to vapour products.

In relation to these vapour proposals we encourage the FDA to introduce enforceable regulations as soon as possible. Further, we encourage the FDA to bring forward the PMTA deadline earlier than 2022.

In relation to menthol cigarettes, while we will continue to engage with the FDA on its proposed plans, it is important to note that:

  • 听When the FDA first examined menthol in 2013, the published science did not support regulating menthol and non-menthol cigarettes differently and the published science since then has not changed this situation.
  • 听While some consumers may prefer menthol cigarettes, the science has not demonstrated that menthol leads to higher levels of initiation, greater dependence, reduced ability to quit or increased health risk.
  • 听Any regulation of menthol in cigarettes must be done through the established comprehensive rule-making process and must be based on a thorough review of the science while considering the unintended consequences of any rule. Failing to do so would mean any such action would not withstand judicial review.
  • 听Regulating menthol cigarettes (which comprise around a third of the market) differently to non-menthol cigarettes will increase the illegal market, fueling more criminal activity, adding further challenges to criminal and social justice issues. Further, as an illegal market in menthol cigarettes will increase, youth smoking access will increase.

We will continue to work closely with the FDA on these important issues, including participating in a thorough science-based review to address the use of menthol in cigarettes. At the same time, we will continue to deploy our best efforts to curb youth access to vaping and tobacco products.

Notes to Editors

(Reference to Reynolds refers to the activities undertaken by one or more of companies that comprise the RAI group of companies)

Measures we already have in place:

  • Reynolds has taken a responsible approach to developing, and subsequently naming, its flavours to ensure they appeal to adult consumers and not children.
  • 听Reynolds age verifies through a third party vendor that all potential online purchases are 21 or older.
  • 听Reynolds is a founding member of 鈥榃e Card鈥, an organisation nationally recognised for retailer education and training for age-restricted products. In 2017, We Card was recognised by 38 state governors.
  • 听Reynolds funds 鈥楻ight Decisions Right Now: Be Tobacco Free鈥 (RDRN), a youth tobacco prevention education programme which was started in 1991 and is an evidence-based, independently tested programme for use by middle-school educators, parents and community groups.
  • 听Reynolds currently has a purchase limit of $200 per transaction and plans to implement a more stringent limit of $80 per week and three devices per quarter while instituting purchase pattern monitoring.
  • 听Reynolds has voluntarily implemented specific guidelines that restrict the content of marketing and advertising materials for our vapour products:
    • 听No testimonials by sports figures or celebrities or any person with special appeal to persons under 21 years of age;
    • 听No person appearing in any advertising materials shall be under age 25 or be styled to look under age 25;
    • 听Content shall not include characters, images, or themes designed to target youth;
    • 听Content shall not be related to youth or youth-oriented activities;
    • 听Content shall not suggest that use of R.J. Reynolds Vapor Company鈥檚 (鈥淩JRV鈥) products is essential to social prominence, distinction, success or sexual attraction, nor shall any content picture a person using any RJRV products in an exaggerated manner; and
    • 听Content shall not depict persons participating in, or obviously just having participated in, a physical activity requiring stamina or athletic conditioning beyond that of normal recreation.

Our presence in the US 鈥 by channel and flavours:

  • 听Reynolds sells vapour products under the VUSE brand name.听 The VUSE brands include VUSE Solo, VUSE Ciro, VUSE Vibe and VUSE Alto.听
  • 听VUSE sells 12 flavour varieties with tobacco, mint and menthol flavours accounting for over 70% of our total VUSE volumes. (Source: internal data, shipments to retail (STR), kit cartridges and refill cartridges, YTD 1/1 鈥 9/23/18).
  • 听Approximately 94% of VUSE consumers are over the age of 25. Moreover, over 60% of our VUSE consumerS are over 35 years of age. (Source: internal data, 1H 2018 Internal Tracker Data).
  • 听The majority of our business for VUSE is through traditional retail and we believe this channel makes up circa 45% of the industry鈥檚 sales, with over 30% in vape shops and over 20% online. (Source: internal data, S&P with McKinsey and PWC).

Enquiries

Annie Brown
P:听+44 (0) 20 7845 2332/M:听+44 (0) 771 441 1893
Email:听annie_brown@bat.com

Investor Relations

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