A nicotine lobbyist described NZ First leader Winston Peters as 'positively disposed' to the industry. Photo / RNZ
By Guyon Espiner of RNZ
Philip Morris allegedly pitched draft legislation to NZ First as part of a lobbying campaign for its Heated Tobacco Products (HTPs), according to documents released in litigation against a US vaping company.
The documents claim Philip Morris corporate affairs staff “reached out to NZ First to try and secure regulation to advantage IQOS” – the HTP with a monopoly in the New Zealand market.
RNZ searched through more than 10,000 documents relating to New Zealand, mostly from 2018 and 2019, which were released as part of legal action in the US against vaping company JUUL.
The documents shed new light on controversial policy changes led by NZ First in the current coalition Government, and the party’s perceived relationship with the nicotine industry.
Last year, NZ First Associate Health Minister Casey Costello halved the excise tax on HTPs at a potential cost of $200 million, a move the Treasury said would mainly benefit Philip Morris as the sole importer.
Costello halved the excise tax on HTPs despite health officials telling her there was no strong evidence they worked as a smoking cessation tool or that they were significantly safer than cigarettes.
Yesterday, NZ First leader Winston Peters described questions from RNZ about the documents as a “tissue of baseless accusations,” which the party would respond to on its own social media pages.
The claim that Philip Morris International (PMI) handed draft regulations to NZ First is made in a JUUL government affairs strategy document written in February 2019 by lobbying firm Bower Group Asia (BGA).
“PMI has given (a) draft piece of regulation to the Government’s coalition partner New Zealand First. New Zealand First has undertaken to put that draft into the policy mix. This is supposed to be secret,” the BGA report to JUUL says.
“The one thing that could drastically change timing and content would be New Zealand First Leader Winston Peters intervening. JUUL should not worry about that. Any regulation he champions is likely to be very industry friendly and highly geared towards commercial interests in the sector.”
The BGA memo warns JUUL to “keep tabs” on competitor activities.
“In particular with respect to PMI and their widely leaked efforts to pitch draft legislation to New Zealand First. By all accounts that regulation is broadly consistent with JUUL objectives.”
In March 2019 BGA provided JUUL with a ‘stakeholder map’ including brief pen portraits of politicians.
The entry for Peters describes him as: “Very powerful. Has a relationship with PMI. Positively disposed. Spoken out against tobacco taxes. Lifetime smoker, now on HEETs.”
Heets are the sticks of tobacco inserted into the Philip Morris IQOS device – the tobacco that was subject to a 50% reduction in excise tax by Costello in 2024.
Clayton Mitchell, a New Zealand First MP who left Parliament in 2020, is described as having a “relationship with PMI” and as a “gatekeeper for Winston Peters”.
Shane Jones is described as a New Zealand First MP who “supports companies that support him. Known to respond to relationship building on the part of companies”.
The BGA report claims the corporate affairs team at Philip Morris has “reached out to NZ First to try and secure regulation to advantage IQOS”.
As RNZ has previously reported, two senior corporate communication positions at Philip Morris are held by people who previously held top roles in NZ First.
David Broome, chief of staff for NZ First between 2014 and 2017, is external relations manager at Philip Morris.
Apirana Dawson – who was director of operations and research in the office of Winston Peters between 2013 and 2017 and led the election campaigns for the party in 2014 and 2017 – is Philip Morris director of external affairs.
RNZ put detailed questions to NZ First but none were answered. Instead, Peters said it was better to respond via its social media pages because RNZ’s radio ratings were declining.
“We get more views than that on just a single post on our Facebook page – not to mention the fact you likely wouldn’t report our reply at all,” Peters said.
“We are not going to entertain the same deceitful attempt from you, using taxpayers’ money, to attack our party.”
In a statement to RNZ, Philip Morris said that none of the reports referred to were prepared on behalf of Philip Morris.
“We were not involved in their preparation and had no knowledge of their content,” a company spokesman said.
Philip Morris would continue to interact with key players in the industry.
“We have every right, and indeed an obligation, to engage transparently with stakeholders,” the company said.
“Philip Morris International is committed to delivering a smokefree future. As part of our commitment, we will continue to advocate for policies which recognise the potential of smokefree products as a better alternative to cigarette smoking.”
The JUUL papers are part of the Truth Tobacco Industry Documents archive, created in 2002 by the University of California San Francisco Library.
The archive, which is still being updated, contains nearly 19 million documents, including 3.8 million relating to JUUL.
The JUUL papers were released as a result of legal action against the company from a range of plaintiffs, including state governments.
JUUL helped bring modern vaping to the world, with a sleek, discrete device and attractive flavours with high levels of nicotine.
But plaintiffs, including individuals and schools as well as state governments, claimed JUUL’s marketing tactics contributed to a rise in youth vaping.
RNZ went through more than 10,000 documents in the Truth Tobacco archive, searching emails, memos, briefing papers, Slack messages, spreadsheets, lobbying plans and clinical trials relating to New Zealand.
The documents show JUUL was planning to launch in New Zealand in late 2019 and saw the country as a “lighthouse market” – one which could promote pro-vaping regulation in other countries.
A July 2018 document, signed by executives from JUUL and BGA, describes JUUL as “a leading alternative nicotine delivery platform” exploring entry into the New Zealand market.
“JUUL’s popularity has skyrocketed capturing 60 percent market share in the United States. JUUL aims to capitalize on this momentum and move quickly to explore product launches in wealthier urban areas across the Asia Pacific with a deep dive, priority focus on New Zealand.”
A market entry strategy document, written in January 2019 and marked “highly confidential,” says New Zealand is a small market offering outsized influence.
It says that “success and positive reputation in New Zealand may enable easier access to Australia” and that New Zealand could serve as “a lighthouse market building JUUL’s reputation”.
In July 2019, a JUUL’s director of public policy and communications emailed colleagues saying New Zealand could “play an outsized role in influencing positive … regulations around the world and we should keep this in mind when resourcing”.
The executive adds that the then-Prime Minister Jacinda Ardern is “respected and highly visible on the global stage” and New Zealand “uniquely positioned” to influence Commonwealth countries and the WHO.
“(It) will be hugely helpful for JUUL to have another friendly government, especially as Canada slowly gets pulled into the US swirl.”
The “US swirl” – including intense scrutiny from the Food and Drug Administration (FDA) and alarm at the extent of youth vaping – enveloped JUUL and the company cancelled its plans to launch in New Zealand.
But the documents show that as of mid-2019 plans for a New Zealand launch were well advanced, with JUUL scoping office space for 30 staff in Auckland and setting up a BNZ bank account.
Much of the BGA analysis on the New Zealand market and political scene is written by Penny Tucker, a former New Zealand diplomat and ex-director of a large Washington lobbying and consultancy firm.
Tucker, now on the Auckland council’s Ōrākei Local Board, is also a former executive director of the NZUS Council.
Tucker said while there were elements she couldn’t discuss – “like all consultants I have enduring NDAs” – she appeared to stand by her reports and believed NZ First had taken the right approach.
“NZ First would have been a natural conduit and my understanding is that they were happy to talk it through,” she said, adding that it was “mature of them to do so”.
NZ First had believed “there needed to be better ways than tax” to stop people smoking and were open to new ideas. “Hence, they were likely to be more positively disposed to business and NGO outreach,” Tucker said.
She did not think that NZ First had become “too cosy” with the nicotine industry and said that if others had looked closely at vaping policy then youth vaping may have been more successfully contained.
As for former NZ First staffers Broome and Dawson going to work for PMI she said, “I think you’d struggle to find a sector where that does not happen a lot”.
The company Tucker worked for, BGA, led Juul’s Government affairs strategy to “pave the way for its entry into the e-cigarette market,” according to a January 2019 document outlining the relationship.
BGA says its 80 experts across the Asia Pacific have “relationships with public health decision makers as well as those driving tax policies in ministries of finance and other regulatory and legislative bodies”.
The documents show Juul agreed to pay BGA US$25,000 a month for the lobbying effort in an initial phase and US$15,000 a month in phase two.
BGA said it would “develop a New Zealand narrative that embraces Juul’s roots as a tech/innovation company and highlights its separate identity and history from traditional tobacco, where the nascent market presents a blank slate for Juul to build its brand and reputation”.
The papers detail an intense lobbying effort to pave the way for Juul, including a high level of interest in Māori.
“Integrate iwi [Māori] and poverty activists perspectives and build bridges in those areas,” JUUL is advised by BGA.
A New Zealand market update from April 2019 says JUUL met with Rebecca Ruwhiu-Collins from smoking cessation programme vape2save and with the Māori health provider Hāpai te Hauora.
It says JUUL managed to address some of their concerns and “we walked away from the meeting knowing that Rebecca and Hapai will be ‘friends of JUUL’ which is precisely what we wanted to achieve”.
A BGA report from August 2018, marked “highly confidential,” advises JUUL to enlist Māori at the top.
“A truly smart company in this space would find a young, engaging and well-connected Maori to manage the brand.”
The documents show Juul tried to team up with the New Zealand Defence Force, mirroring a US strategy which attempted to convince millions of veterans and serving military personnel to switch from smoking to vaping.
Jason Forrester, who served as US Deputy Assistant Defense Secretary for Reserve Affairs, Manpower and Personnel, wrote to NZDF in February 2019 saying he was a senior adviser to Juul.
“JUUL is very interested in discussing the possibility of partnering with the NZDF to field a pilot study (focused on switching from smoking to vaping) with an element of your force – for instance a ship or unit that is soon to deploy.”
Despite his efforts – Forrester told the NZDF he was travelling to New Zealand and would discuss the idea in person – NZDF turned Juul down, saying it couldn’t endorse products because of ethical considerations.
Multiple documents refer to the use of influencers to spruik the product.
A March 2017 email lists a San Francisco drummer (“pay with product”), a Los Angeles DJ (“maybe pay a little not much”) and “Sophie Hardley New Zealand socialite / fashionista - might be too young”.
The documents show Juul engaged top law firm Russell McVeagh to help them shape regulations in New Zealand.
In a June 2018 email Ken Bishop, Juul’s Vice President of International Growth for Asia Pacific, tells the law firm he’d like to retain its services.
He says the goal is to “shape the regulations in New Zealand in order to create a favourable environment for a future launch and then use the New Zealand regulations as a template and proof point for future regulations in Australia and wider Southeast Asia”.
Juul’s government affairs strategy for New Zealand, written in August 2019, lists the risks to be mitigated for a successful launch.
“Avoid regulations that would restrict JUUL’s full market access,” it says. “Blunt the perception that JUUL’s entry will cause a youth vaping epidemic.”
-RNZ