New Zealand cuts 50% tax on heated tobacco products, sparks controversy, Ministry of Health and deputy minister disagree

New Zealand cuts 50% tax on heated tobacco products, sparks controversy, Ministry of Health and deputy minister disagree

New Zealand's deputy health minister Casey Costello cut excise duty on heated tobacco products (HTPs) by 50 per cent, effective July 1, but the move has sparked questions from the Ministry of Public Health.

 

According to the NZ Herald on July 18, New Zealand's deputy health minister Casey Costello cut excise duty on heated tobacco products (HTPs) in an effort to make them more attractive as an alternative to smoking.

 

Costello, who is also the customs minister, has cut excise duty on heated tobacco products by 50 per cent, effective July 1, a decision that has been published on the customs website.

 

Costello declined to be interviewed by Radio New Zealand (RNZ), but her spokesperson said she took the step to reduce the cost of these products and encourage smokers to switch to safer alternatives.

 

But Janet Hoek, a professor of public health at the University of Otago, told RNZ the move appeared to favour the interests of the tobacco industry.

 

"Obviously, this is an outcome that tobacco companies would very much like to see, and this is not a recommendation from the Ministry of Health. This is clearly a recommendation that is in the interests of the tobacco industry."

 

Tobacco giant Philip Morris (PMI) has lobbied for a cut in excise duty on HTPs, telling the Tax Working Group in 2018 that the government should "set a tax rate for heated tobacco products that is significantly lower than the tobacco tax rate".

 

In a statement to RNZ, Costello said e-cigarettes were a successful smoking cessation tool and she wanted to see if HTPs could also be a useful smoking cessation device.

 

"E-cigarettes are not suitable for everyone, and some people who try to quit smoking make multiple attempts. HTPs have similar risks to e-cigarettes and are currently available legally, so we are testing the impact of reducing excise duty on these products on smoking cessation."

 

Documents released by the Ministry of Health show Costello also asked for advice on relaxing the regulation of HTPs, but was opposed by the Ministry of Health.

 

"There is no evidence to support their use as a smoking cessation tool and we do not recommend relaxing the way HTPs are promoted. This could exacerbate existing concerns about youth use and nicotine addiction."

 

Earlier this year the government scrapped Labour's smoke-free plan, which Ministry of Health officials had described as the "end game" for New Zealand's tobacco industry. The measures would have reduced the number of tobacco retailers from 6000 to 600, cut the nicotine content in cigarettes by 95 per cent and create a smoke-free generation by banning the sale of cigarettes to those born after 2009.

 

Costello said she was committed to the Smokefree 2025 goal and was considering whether to allow the sale of oral nicotine products such as snus and nicotine pouches to help achieve that goal.

 

Ministry of Health documents show Costello recommended in March that a cabinet committee "agreed in principle to allow the sale of smokeless tobacco and nicotine products that are significantly less harmful than smoking".

 

But the Ministry of Health warned Costello against allowing the sale of snus and nicotine pouches.

 

"Overall, we do not recommend expanding the range of nicotine products that can be sold in New Zealand, additional products are likely to exacerbate existing concerns about nicotine addiction in young people with little benefit."

 

"There is currently no evidence to support them as a harm reduction alternative to smoking, nor evidence of their effectiveness in quitting smoking, there is evidence that they are marketed to children in other countries and are associated with nicotine dependence and addiction. Children, adolescents and non-smokers are considered to be at high risk."

 

In a statement to RNZ, Costello was more cautious about nicotine pouches than indicated in the cabinet committee document.

 

"I have concerns about nicotine pouches because they appear to be targeted at young people."

 

The assistant health minister said she would continue to seek advice on the effectiveness and safety of alternative smoking products.

 

"If there are smokeless tobacco or nicotine products that are significantly less harmful than smoking, that is, they have similar risks to e-cigarettes, then I would like to give advice on whether it is necessary to allow them to help people quit smoking. We need to find a balance that we don't want young people to become addicted to nicotine. New Zealand started late in regulating e-cigarettes, resulting in uncontrolled e-cigarette use among teenagers."

Currently, large tobacco companies have used nicotine pouches as an alternative source of revenue.

 

In 2022, PMI spent $27 billion to acquire Swedish Match, which produces ZYN nicotine pouches.

 

British American Tobacco (BAT), which owns VELO and LYFT nicotine pouches, has lobbied the government to legalize these products.

 

In its 2021 smoke-free plan report, the New Zealand government said,

 

"The government has missed an important opportunity to promote smoke-free 2025 by failing to include smokeless oral nicotine products in the same regulatory framework as e-cigarettes."