Jonathan Fell, founder of Ash Park, a fund management firm based in the United Kingdom. (Photo from the Facebook account of the Global Forum on Nicotine)
MANILA, Philippines — Investing in noncombustible alternatives to cigarettes will benefit public health, according to Jonathan Fell, founder of Ash Park, a fund management firm based in the United Kingdom.
Ash Park manages the Ash Park Global Consumer Franchise funds.
“I think there’s a lot of upside from industry investment in harm reduction if we can move the discourse beyond that ‘Big Tobacco’ mental model and refocus the conversation on a more open-minded conversation and look at what consumers want,” Fell said during the 8th Global Forum on Nicotine which took place on June 17 and 18 in Liverpool, England.
“You can see that the market is putting a much higher valuation on companies that are making that transition away from combustible products. And of course, the companies and their executives notice that too and it’s reflected in the incentive plans of a couple of them,” he added.
According to a recent statement, Fell delivered the second Michael Russell keynote titled “Investment in Nicotine Innovation: Risks and Rewards for Public Health.” There he shared his insights on tobacco harm reduction (THR), a strategy that aims to mitigate the impact of smoking on public health.
Innovative non-combustible alternatives — such as e-cigarettes, heated tobacco products, and Swedish snus — are considered part of THR.
In 2013, Fell, who manages long-term, high-quality investments in the consumer goods industry, headed the consumer equity research group at Deutsche Bank in London. In that post, he covered the tobacco and beverages sectors, following earlier spells at Morgan Stanley and Merrill Lynch.
Also taking part at the Michael Russell keynote as a responder was Professor David Sweanor, advisory committee chair of the University of Ottawa Centre for Health Law and Policy in Canada.
He pointed out that technology had been reshaping the tobacco industry, with more consumers switching to nicotine products considered to be less harmful than combustible cigarettes.
“We see a tremendous number of consumers are very willing to move to these products, if the products are available, they have decent information. And the global market for cigarettes is approaching a trillion US dollars a year with over a billion users,” Sweanor said.
Sweanor has been actively involved in tobacco and health policy issues since the beginning of the 1980s and has worked globally with numerous groups, including the International Union Against Cancer, World Health Organization, World Bank, and the Pan American Health Organization.
He played a key role in achieving many global precedents in tobacco policy. He now focuses much of his tobacco and nicotine-related efforts on risk reduction strategies.
“I think we need to be studying the industry. We need to be looking at the new players. We need to understand this is a very dynamic situation,” Sweanor said. “And we need to try to shape that through intelligent regulation, through having an intelligent discourse to look at how did we transform other industries like what’s going on with the automotive industry now, moving with the internal combustion engines.“
“What happened to move from unsanitary to sanitary food, from snake oil to science-based pharmaceutical products? How did we transform all these other industries? What are the lessons in that for us? And what can we do by understanding how this industry operates but also understanding who’s the industry? What’s the difference between companies that are selling tobacco products and companies that are selling alternative products? What’s the difference between cigarettes and non-combustible tobacco products? What are the divisions between the different companies?“ Sweanor added.
He noted, however, that there remained a lot of misconception about noncombustible alternatives.
“Much of mainstream tobacco control thought that vaping was a plot by Big Tobacco, these new evil geniuses, and it had to be attacked. And the best thing we could do would be to attack these alternative products,” he said.
“You’re not recognizing what they were doing was really protecting the cigarette market, which is where these companies made massively higher profit margins on a sustainable basis. So, it was a failure to grasp the reality of what’s going on.”
Sweanor said the easiest way to incentivize the companies to transform and do more would be to stop banning the alternatives.
“There’s tremendous potential in all of these markets, you know, and anybody who thinks that new technology cannot be acceptable in low and middle-income countries needs to understand what happened with smartphones. I mean, just take away the bans, give an incentive for people to move in this direction,” he said.