Marlboro maker Philip Morris wants to stop selling cigarettes in UK Could it ever happen in the US?
Could America ever give up its cigarettes?
The head of Marlboro maker Philip Morris International (PMI) made headlines last week when he said the company wanted to end the sale of cigarettes in the UK by 2030, in line with the goals of the government.
“I want to allow this company to quit smoking,” CEO Jacek Olczak told the Mail on Sunday, a British tabloid, on Sunday. “I think in the UK, in 10 years or less, you can completely solve the smoking problem.”
Even though it’s not the first time he’s made such a statement, when it comes to quitting smoking in America, the tone is a bit softer.
Altria, the parent company of Philip Morris USA, takes a slightly more covered position than PMI, a separate company formed in 2008.
“At Altria, we strive to go beyond smoking and our Vision 2030 to responsibly lead the transition of adult smokers to non-combustible products,” said company spokesperson George Parman , to NBC News in an email.
“We have the ability to make significant progress in harm reduction and public health,” with Altria’s smokeless product assortment, Parman said.
These smoke-free products include PMI’s IQOS heated tobacco device, which received limited FDA approval in early July to be marketed as a modified risk tobacco product that reduces a person’s exposure to harmful chemicals. . Altria is the exclusive licensee of the device in the United States, where it will be sold by Philip Morris USA, which manufactures Marlboro cigarettes for the domestic market.
PMI and Altria both have a 10-year goal for their vision statement. But while the international tobacco company says explicitly that it wants to quit smoking all together within that time frame, the American tobacco company leaves more room for maneuver.
The gap between the visions of the two companies is the expression of a difference in strategy for the target markets, reflecting the differences in cultural, political and commercial realities, according to the experts.
“Smokers in the United States may be more determined in their desire to maintain the ‘freedom’ to smoke, a slightly unique American provision that is not as strong in other countries,” said Kathleen Hoke, professor of law. and director of the Center for Tobacco Regulation at the University of Maryland School of Law.
Smoking as an emblem of independence dates back to at least the 1920s. At the time, there were taboos against women who smoke and do so publicly. In 1929, public relations mastermind Ed Burney paid young women to march in the Easter Sunday parade in New York City on Broadway and smoke their “Torches of Freedom!” “
“I felt invincible, ridiculously invincible,” said former smoker Monica Beaky, 58, of how she felt when she started smoking at 13.
After a doctor diagnosed him with a cancerous tumor on his tongue at the age of 49, the New York-based product apparel manager switched to vaping. Eventually, she started working part time in a vape store on training new customers. Younger men and older women were easier to convince to try, she said, but older men were more difficult.
For older men, “vaping is baby stuff,” she said. “I’m a man, so I’m going to smoke unfiltered camels. It’s a macho thing, tempting fate.
From 2014 to 2020, e-cigarette sales increased 122%, according to data from the Centers for Disease Control and Prevention. Meanwhile, cigarette sales have fallen by at least 20%, continuing a long-standing decline, according to data from the Federal Trade Commission.
Attracting more smokers who want to try a combustion-free nicotine delivery mechanism is the cornerstone of PMI’s new business model, starting with its IQOS device. The company told investors in February that it expects its smoke-free products to generate more than 50% of its net sales by 2025. It also plans to become a majority smoke-free company of here that year.
The company projects nearly $ 1 billion in new opportunities in botanical wellness products and respiratory drug delivery by 2025. In July, PMI agreed to buy the UK drug company against inhaled asthma Vectura Group for $ 1.2 billion.
Industry analysts say the company is on track to profitably convert to a smoke-free business.
“We see a strong track of accelerating revenue and earnings growth ahead, fueled by the huge cumulative effect of IQOS,” Goldman Sachs analysts said in a research note reviewed by NBC News. Several models at different prices are planned, the company said.
PMI generates 2.4 times more revenue per heated tobacco stick with its IQOS device than with traditional fuel cigarettes, according to the research note. Sticks are also subject to lower excise duties than regular cigarettes in most countries.
“[Philip Morris] is able to take advantage of IQOS ‘tax advantage by passing part of the savings on to consumers to be more competitive on prices (compared to premium cigarettes), which allows it to attract new consumers ”, wrote analysts at Goldman Sachs. “This makes IQOS [heated tobacco units] equivalent to mid-priced cigarettes, which increases PM’s pricing power / leverage. “
Critics are skeptical of the company’s motives.
“If PMI were to seriously consider banning combustible cigarettes within 10 years, it would strongly support strong new government action now to make cigarettes (and all tobacco products smoked alike) less attractive, less addictive, more expensive and otherwise less easily accessible to two smokers. and non-smokers, especially young people, ”said Eric Lindblom, professor of law at Georgetown University. “But they didn’t.”
Plans for the continued deployment of the IQOS device in the United States seem a bit hazy at the moment.
Last week, Philip Morris USA revealed in its second quarter results that it had “delayed further expansion of IQOS and Marlboro heatsticks” due to legal uncertainty following an unfavorable ruling by the United States International Trade Commission when it reviewed a judge’s findings in patent infringement. case brought by British American Tobacco against rival PMI.
Philip Morris International is “in the middle of a long, multi-step legal process” before the commission, spokesman Corey Henry said in an email. The company would continue to rely on its sole US distributor Altria “to take all necessary steps” to ensure that IQOS “is as successful in the United States as it has been around the world.” did he declare.
BAT could not immediately be reached for comment.
The World Health Organization has estimated that smoking, both through direct tobacco use and exposure to second-hand smoke, kills 8.2 million people a year worldwide.