Tobacco Asia

10 tobaccoasia / Issue 1, 2020 March / April Q&A THE TA Q A Tobacco Asia: As an industry veteran with over 30 years' experience, you've seen many of the big and small changes the tobacco industry has gone through. What are some of the more "monumental" changes that come to mind? Dr. Iqbal Lambat: I will comment on four broad themes that come to mind. Tobacco Attitude. I started my career in tobacco with Philip Morris International in Lausanne, Switzerland in 1987. The tobacco to be used in their products had to be the very best and no compromises would be acceptable. The tobacco being the "holy grail" of the cigarette was an attitude also practiced by the other major players. That is why tobaccos were bought three to four years in advance and kept in inventory to always be able to offer a consistent taste. Also, a cigarette was manufactured with one gram of high-quality leaf which means a mastercase of 10,000 cigarettes used 10 kgs of tobacco. Fast forward to today and we live in a different world. Leaf quality has decreased in order to save on costs. In addition, more tobacco derivatives are used in the blend such as reconstituted tobacco, cut rolled expanded stems (CRES), expanded shredded stems (ESS), dry ice expanded tobacco (DIET), and tobacco fines. Your typical cigarette today will comprise 50% tobacco leaf and 50% derivatives, all heavily cased and flavored to mask the poor quality of the blend. Also, the quantity of the blend in the cigarette has been reduced from 1 gram to 0.75 gram, due to the high filing power of the derivatives. As a result, the natural sensory impact of the cigarette has been lost and significantly modified, generating a more chemical taste. Finally, the cigarette burns faster generating a much lower puff count compared to 20 years ago. Market Noise. In the 1980s, the tobacco world was simple. At least 95% of the tobacco universe was composed of mainstream international cigarettes (mostly American blend) with the balance being made up of pipe tobacco and cigar products. Initially driven by fast rising excise tax, roll-your-own (RYO), and make-your-own (MYO) fast grew to become a major category in the US, most of the EU, and Australia. Over the past decade vape products have entered the industry accompanied by various forms of heat-not-burn (HNB) products. When one looks at the inside of a tobacco retailer today, there are so many products on the shelf causing confusion. The explosive growth of the shisha category has also added to this broadened consumer offering and increased consumer confusion. Smokers' Rights. Well in the 1980s, smoking was still possible on most airlines and in virtually all public spaces (excluding hospitals for logical reasons). Today one has to look around very carefully outside to make sure that one is smoking in a designated outdoor area. Almost all indoor (with some country exceptions) are now fully banned and outdoor is increasingly being regulated (parks, beaches, balconies, etc). Have the captains of the tobacco industry abandoned the fight for smoker freedoms by enthusiastically agreeing with regulators to accept and implement all restrictive legislation? Twenty years ago, the stance was "We're right and we fight for our free- doms!" That's definitely changed to "Thank you for allowing us to smoke in designated areas only!". Dr. Iqbal Lambat is one of the tobacco industry's most legendary figures. The founder and c.e.o. of Star Agritech International, Dr. Lambat has enjoyed a long-span- ning career with some of the world's leading blue-chip companies, such as Piaget/Baume & Mercier, Dow Chemical Europe, as well as large companies like Philip Morris International, R.J. Reynolds International, and Japan Tobacco International, to name but a few, before establishing Star Tobacco International, which was rebranded Star Agritech Interna- tional in 2018. Holder of a triple master's degree in finance, market- ing, and economics from Webster University Geneva and a doctorate in international finance from Business School Lausanne, Dr. Iqbal Lambat Star Agritech's headquarters Dr. Iqbal Lambat Lambat's keen observations consistently demonstrate his in-depth understanding of the industry and are articulate and thought-provoking. Here Dr. Lambat shares some of his insight with Tobacco Asia.

• Cover