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Economics References Committee
Personal choice and community impacts

JENKINS, Dr Stephen, Director, Regulatory and Medical Affairs Asia Pacific, Nicoventures


CHAIR: Welcome and thank you for appearing before the committee today. I invite you to make a short opening statement should you wish to do so, and then the committee will ask questions.

Dr Jenkins : Chair and committee members, thank you for inviting me to appear before your committee hearing today. I represent Nicoventures, a division of British American Tobacco. Our nicotine-containing electronic cigarettes are sold in a number of European countries, including the UK, France and Germany. It does not make sense that, despite the ever-growing evidence in support of electronic cigarettes, Australia's restrictive approach to nicotine prevents smokers from buying them legally here.

The most comprehensive review of electronic cigarette science was recently published by the English Department of Health. This review was led by independent academics with a long history in tobacco control, who reviewed over 180 different studies and sources. This review concluded that electronic cigarettes are around 95 per cent safer than smoking, that there is no evidence of a negative impact on tobacco control and that when used as intended electronic cigarettes pose no risk of nicotine poisoning to users.

The conclusions of this review were supported by a number of highly respected health groups, including Action on Smoking and Health UK, the British Lung Foundation, Cancer Research UK, the Royal College of Physicians and the Royal Society for Public Health. More locally, recent research undertaken by STW Group for Nicoventures shows that 85 per cent of Australian public health professionals would support a regulated market for electronic cigarettes. I have tabled that research for your reference.

Why then are Australian smokers being denied access to these products? It comes down to the fact that they are treated like prescription medicines, which they are not, or like tobacco cigarettes, which they are not. Places such as the UK and the European Union control electronic cigarettes through dedicated regulations, as you have heard from a number of people. For example, French and British standards agencies have recently published specifications to support the quality and safe use of these products. A template exists. Nicoventures supports such an approach and would like to see a proportionate regulatory framework for electronic cigarettes in Australia. This would support bans on sales to under-18s, adoption of dedicated product standards and high-quality consumer information—all to support quality and safe use.

What should be done in Australia? The situation in Australia is perverse. Our laws deny smokers legal access to a product that respected and knowledgeable public health authorities estimate to be around 95 per cent safer than tobacco cigarettes. A specific regulatory regime is required allowing nicotine-containing electronic cigarettes to become available—just as nicotine patches and gums are available today—while ensuring 18-plus access and mandatory product standards. This can be achieved simply through a change in the classification of nicotine under the federally administered poisons schedule and the adoption of an electronic cigarette quality standard through something known as a therapeutic goods order. Both measures can be undertaken by the Therapeutic Goods Administration today. These two steps could readily and effectively create a well-controlled environment within which smokers can legally buy high-quality, effective electronic cigarettes as an alternative to tobacco. It is not reasonable today that, because of our outdated nicotine controls, these products are more restricted than gums, patches and tobacco.

I have cited various documents during my introductory statement and I have tabled them for the committee's reference. I am happy to take questions.

CHAIR: Is it the wish of the committee to accept the tabling of these documents? There being no objection, it is so resolved.

Senator KETTER: Dr Jenkins, do you sell products in the United States?

Dr Jenkins : No, we do not.

Senator KETTER: But there are some companies that do?

Dr Jenkins : There are many companies selling electronic cigarettes in the US.

Senator KETTER: Are you familiar with the case of a child who died after ingesting liquid nicotine in New York?

Dr Jenkins : I have seen reports of ingestion. I think one of the reviews—of the many that have been considered for these products—covered it. Clearly these products should be labelled appropriately. Nicotine, as I said in my statement, when used as intended is safe. You can walk down the street today and buy a pack of, say, nicotine gum that contains just over 800 milligrams of nicotine. However, it is presented with appropriate statements on it so that people use it and store it appropriately. That is absolutely the reason we need an effective regulatory regime in Australia—so users are informed and do not leave product lying around. The product that is available complies with a standard that ensures it is tamper-evident and child resistant—all of those controls to ensure that any risks to the wider community are minimised appropriately. And we can track it to ensure the regulations are having the intended impact.

Senator KETTER: The products you sell in Europe—are the liquid containers childproof?

Dr Jenkins : They are child resistant and comply with appropriate standards, yes.

Senator KETTER: According to reports I have seen, a dose of half a teaspoon of this product can kill a child. Do you agree with that?

Dr Jenkins : Again I would go back to the perspective that, while I am not familiar with that report, nicotine—like many household products—should be controlled in a way that ensures safety. And, when used at the levels and the amounts that are commonly used in electronic cigarettes today—by the half-million or so people in Australia that are using them currently today—the evaluation, not from myself but from groups such as Public Health England and public safety groups, as well as other anti-tobacco groups, concludes that they do not represent a danger when used as intended. Our responsibility is providing products that comply with standards so that they can be used responsibly to ensure safe usage and appropriate outcomes.

CHAIR: Mr Jenkins, just for clarification, I think we have your title wrong. You are a doctor, is that right?

Dr Jenkins : Doctorate, yes; a PhD in chemistry.

CHAIR: A PhD in chemistry, and not a medical doctor. All right. Is it correct that your company sells e-cigarettes in the UK and in Europe?

Dr Jenkins : UK and a number of European states; yes.

CHAIR: Do you have a rough estimate of your market share of the e-cig market in the UK?

Dr Jenkins : I have not got the figure. I can give you our latest data; I have not got it here. We are a minor player.

CHAIR: A minor player.

Dr Jenkins : It is growing; we are growing, and we are bringing significant products to market at the moment. But there are a number of organisations out there selling it.

CHAIR: So are you nowhere near being a major player?

Dr Jenkins : Well, I would not say that! I would say that we have aspirations. We have entered the market relatively recently. There are a number of products out there—a wide range, as you have heard—at the moment.

CHAIR: Do you not sell any e-cigarette products in Australia?

Dr Jenkins : We do not sell any cigarettes—

CHAIR: It is illegal.

Dr Jenkins : As I said, electronic cigarettes—

CHAIR: They are not permitted.

Dr Jenkins : containing nicotine are regulated by the Poisons Standard which, in effect, makes them unacceptable.

CHAIR: Would it be safe to say that the restrictions in Australia preventing people who are smoking your cigarettes in Australia from switching to e-cigarettes are actually beneficial to your company?

Dr Jenkins : The company I represent is Nicoventures.

CHAIR: Your parent company, should I say.

Dr Jenkins : I would say that we have a clear-stated mission of providing harm-reduced, high-quality products in all our markets. We have launched these products in the UK.

CHAIR: There is nothing to apologise for, Dr Jenkins. I am really just trying to get the basis of facts here.

Dr Jenkins : I am not apologising; what I am stating is that it is very clear that there is an opportunity, and smokers are making decisions seeking out a range of different products.

CHAIR: I am thinking about your business and your parent company. Is it in the interests of your parent company that smokers keep smoking your tobacco products, in Australia, as opposed to switching to e-cigarettes?

Dr Jenkins : I would say our intention here is that we believe smokers should be given access to a choice of products and clearly, when smokers in Australia are being denied access to a product that, legally, they can get in the UK et cetera, that is a challenge. But equally, that is why we believe that giving smokers legal access to these products—so that they can have access to products that comply with the standards—

CHAIR: I understand that. In the UK, when somebody stops smoking your tobacco products and they switch to e-cigarettes, given that you have a small market share, the likelihood is that you lose sales. Would that be a fair statement? I am talking about your total organisation, not Nicoventures.

Dr Jenkins : I have not considered it in that way, to be honest.

CHAIR: It would seem to me that, unless your share of the e-cigarette market was equivalent to your share of the tobacco market, that would be fairly likely.

Dr Jenkins : All I would say is that we are very committed to bringing these products to market and making them as successful as we possibly can. Ultimately, smokers will make their choices and end up choosing the products that most and best meet their needs.

CHAIR: Can you ever envisage a situation where you are a totally e-cigarette company and not a tobacco company?

Dr Jenkins : That situation may occur sometime in the future but I think, again, that will be dictated by people's choices. What we are clearly around today is Nicoventures making high-quality, nicotine-containing electronic cigarettes and harm-reducing products available for smokers so they can make an informed choice. I think ultimately, smokers will be the decider of that.

CHAIR: I entirely agree; I would like to think that was the case. Some of the witnesses earlier this morning expressed the view that the real innovation and the real progress in e-cigarettes is through smaller companies rather than big ones like Nicoventures and the other major companies and other tobacco companies. Is that how you see it or do you think Nicoventures is up there with the technology?

Dr Jenkins : I would say innovation in the marketplace is coming from many different organisations. Clearly, the scale of our organisation and the investment we are putting in with it are leading to a rapid evolution in development of the technologies we present. Equally, as in many industries—pharmaceuticals et cetera—there are small companies that, because of their number, will generate innovative new things as well. I think the market will decide where that innovation plays out, really. It is a matter of not restricting that innovation with needless and misplaced regulation. That is something that impacts us; it impacts small companies; but, most importantly, it impacts smokers, who are being denied access to these products because of the regulation that we are being faced with in Australia today.

CHAIR: Do you think your products in the e-cigarette market are state-of-the-art at the moment?

Dr Jenkins : We are very happy with our products and how they are performing.

CHAIR: That is not the same thing as state-of-the-art.

Dr Jenkins : I was getting to that point. We are very happy with where they are, we are very happy with how they are performing and we are very happy with the feedback we get from smokers. I think that is one of the challenging things in this environment today—it is moving so quickly. You saw the number of devices here this morning. The market is evolving so quickly that you cannot think that you have got it. It is a continual investment to improve the experience, to improve the offering and to improve the usability of the products so that they offer the maximum benefit. Am I happy with where we are today? Yes. Am I happy that we have a development pipeline and a development intensity around our pipeline to ensure we continue to innovate? Yes. Is that because smokers demand it? Absolutely. Are other people doing it as well? Absolutely. It is the perfect place. We have not got a stable technology in that way; it is improving all the time.

CHAIR: Who do you see as your chief competitors?

Dr Jenkins : Again, there are a range of organisations out there that are selling e-cigarettes. Ultimately, it comes down to offering smokers the choice of the product they want to use. We do not have any competitors in Australia because we are not playing here.

CHAIR: I meant in the UK, actually.

Dr Jenkins : In the UK market, I would say there are a number of products that are being distributed. I cannot recall, to be honest. I would be guessing what the number of competitors is in the UK and where their share is at the moment, because they are moving around so quickly.

CHAIR: In the context of the regulatory regime that you were referring to in your opening statement and in response to an earlier question, you talked about child-proof packaging and that sort of stuff—that is fine. What other sorts of regulations do you think e-cigarettes require? In relation to distribution, for example, do you have views on what level of regulation is warranted there around availability to under-18s, where e-cigarettes can be used and those sorts of things?

Dr Jenkins : From a product standards perspective, it is very clear. If you start from the products and move out to how they are used, clearly they should comply with normal electrical standards so that you are confident, when you are charging them, that they will perform electrically. Absolutely, the liquid that goes into them should comply with a standard to ensure that it is pure and safe for its intended use. Absolutely, the device should perform in a way that, when it converts the liquid to a vapour, it does that in a way that is appropriate and generates the highest quality vapour possible.

From the e-liquid, absolutely—child-resistant, tamper-evident closures to ensure that again, they can only be used as intended. Wrapping around that; there should be quality labelling on these products to ensure that people understand whether they should use them and whether they are inappropriate for them, and also that they should keep them out of the reach of children.

Regarding distribution: it seems reasonable to me that any time a smoker is faced with a choice on what product to use, whether it is patches, gums or cigarettes, they should have an e-cigarette as a viable alternative at that time. We have seen on many public health initiatives that keeping things secret in a box does not actually work. It has to be available; it has to be in that moment of choice.

CHAIR: So let tobacconists sell e-sticks?

Dr Jenkins : I would say we should allow smokers to buy these wherever they may come across tobacco, cigarettes or any other product. Just as you can walk out to the 7-Eleven and purchase nicotine gum, you should be able to purchase them there.

Regarding advertising: it is very clear that people have to be aware of products, but I believe in advertising in an appropriate way to inform adult smokers of these availability of these products. I come back to what someone said earlier around usage; when these products have been considered by public health organisations, they see no safety evidence that would justify the restrictions. Absolutely, consider that usage perspective but if someone has made the decision to stop smoking, what is the justification of making them go outside to stand with smokers to use these products? The decision on that usage, I think, is appropriate for the individual location to make that decision.

Senator KETTER: Could I just have a follow-up on that, please? I am looking at the British American Tobacco website, and it tells me:

Questions are also asked about the possible long-term effects of inhaling substances found in e-liquids, such as glycerol and propylene glycol. Although these ingredients are commonly approved for use in food and medicines, we believe that more research is needed in relation to their inhalation and so we are planning our own studies in this area.

That is a quote from the website. It sounds to me that you are not completely convinced of the long-term health effects of inhalation of the—

Dr Jenkins : I think there are two parts to that. Our belief is that this is technology we want to clearly understand more and more. Hence, we have some research, and some research was recently published in Chicago at a global tobacco control conference, again, showing the high quality of the products and the vapour they generated. As you look at the ingredients—as you look at many products—there is a wealth of evidence around these ingredients on their use and exposure levels. That can be used to make reasons and rational, scientific assessments of their appropriateness. That is why we believe it is appropriate that you have a standard around liquids, so it is not open slather for what goes in. There should be controls and standards around it, so you have appropriate due diligence. I do not know whether that answers your question.

Senator KETTER: I think for the time being, yes.

CHAIR: A final point, Dr Jenkins; there are heat-not-burn products being promoted and developed—in fact, one of your major competitors is pushing ahead with those. What do you think about them, and how are they different from e-cigarettes?

Dr Jenkins : They contain tobacco, and so they are a tobacco product. Electronic cigarettes do not contain tobacco, and so they are not a tobacco product. I see it quite simply in that sense. That is why we are so passionate electronic cigarettes should not be treated like tobacco; they should not be treated like medicine. They are not tobacco.

CHAIR: In terms of relative safety, do you have a view on e-cigarettes versus heat-not-burn?

Dr Jenkins : I have not delved into the data around those other people. I know that on independent evaluations of electronic cigarettes, given the wide availability in the UK market today, at least 95 per cent is the number that is the consensus around that. Not only is it the consensus of the group of academics who conducted the independent review I referred to but, post that review—which I think is compelling—a number of other authorities, such as the British Lung Foundation and Cancer Research UK, have come out in support of that report's findings.

CHAIR: Considering that our Australian public health people have maintained such trenchant opposition to e-cigarettes, that would suggest that one of them is wrong.

Dr Jenkins : That is why this committee's inquiry is such a powerful opportunity to have the discussion made public. New supportive evidence is emerging all the time, so it is important to have these public inquiries so you have the best information in front of you. Secret reviews do not help. I think that transparency and openness—and actually asking both sides, asking the tough questions—is valuable in that sense, in actually challenging the basis of concerns. I ask you to be sceptical of anything I put out. Equally I ask you to be sceptical of any other point of view, to really understand where the evidence is.

All of the concerns that have been put out are dealt with by the evidence. The Office of National Statistics in the UK reported that only 0.14 per cent of people who use electronic cigarettes were people who had never smoked. There is similar research out of the US Federal Drug Administration Centre for Disease Control. Those are markets with far fewer controls than would exist in a place like Australia. There is similar data on the level of prevalence of non-tobacco users in Canada. So the evidence consistently delivers that message. We just need it discussed in an open forum, and challenged in an open forum, so we can come to an informed decision. It is not reasonable, given that amount of evidence, that nicotine, and hence the electronic cigarettes that it is used in, are controlled to such a degree, denying smokers access.

Senator KETTER: I note your e-liquids are manufactured in Italy and the UK. I am wondering what the commercial alternatives are for extracting nicotine. It comes from the tobacco plant, but are there any other commercial ways of manufacturing nicotine?

Dr Jenkins : No, all commercially available nicotine is extracted from tobacco plants. That is whether it is in patches and gums or in electronic cigarettes. There are exacting global standards—European Pharmacopoeia standards, for example—around nicotine to ensure that its purity level is understood, well-characterised and is at a level that has gone through the scrutiny of agencies, such as the WHO et cetera, to ensure that it is appropriate for use. While alternatives may be theoretically possible, practically they are not reasonable.

Senator KETTER: It suits your business operation, being a tobacco producer, to continue to use tobacco in whatever form, whether it is in e-liquid form or in conventional cigarettes?

Dr Jenkins : Again, I do not have a view on the distribution chain of tobacco. I know that all nicotine that is used, whether it is in the patches and gums today, or whether it is used in the electronic cigarettes that we or any other organisation manufactures, comes from a few places that produce and purify pharmaceutical grade nicotine.

Senator KETTER: The actual delivery system—the hardware, the electronic components—you manufacture those as well?

Dr Jenkins : Yes, we manufacture those as well.

Senator KETTER: I am not asking for any company secrets here, but are you able to give some indication of the profitability of your company with this form of nicotine delivery as opposed to cigarettes?

Dr Jenkins : Aside from the fact that clearly there is a commercial opportunity in this, as we have seen with the growth globally—absolutely. Organisations are involved with that, but that does not diminish the fact that these are also products which, when considered and reviewed by independent authorities that look at all the data, that undertake a comprehensive review of the data, which from a scientific perspective you have a responsibility to do—you may hear lots of cherry picked data, and it is very easy to cherry pick; you quite often see, whether it is with bread or whatever, studies that are cherry picked in the common press—consistently come out at 95 per cent. That is the number.

CHAIR: Nicoventures actually runs pretty much at arm's length from BAT?

Dr Jenkins : Yes—from the tobacco business. We are obviously part of the British American Tobacco organisation.

CHAIR: Yes, but in managerial terms, I understand, you are relatively distant from the tobacco business. Is that right?

Dr Jenkins : Yes, it is managed separately. We sit within the same organisation, but we are managed separately.

CHAIR: Thank you, Dr Jenkins. We appreciate you coming along and giving your evidence today.

Proceedings suspended from 12:50 to 13:47