Philip Morris says he wants to quit traditional cigarettes

Philip Morris says he wants to quit traditional cigarettes

Lausanne - An unexpected message filters from the Philip Morris headquarters in Lausanne: they say they want to focus on the gradual downsizing of the business of traditional cigarettes in favor of electronic and non-combustion ones. The strategic commitment has been brewing since the early 2000s but is now summed up with the slogan: "If you don't smoke, don't start. If you smoke, quit. If you don't quit, change". In practice, the company says it has launched a gigantic international operation that underlies the ambition of wanting to convince smokers to abandon traditional cigarettes and all products based on the combustion of tobacco. And "with the right regulatory frameworks, dialogue and support from civil society, cigarette sales could end in 10-15 years in many countries," argues the giant born in 1950 in New York.

Proof whether in the research and development center in Neuchâtel in Switzerland - renamed the "cube" - a new line of combustion-free products is already ready. The bottom line is that Philip Morris is working to ensure that e-cigarettes (Veev), those with heated tobacco (Iqos and Lil Solid) and other future models (Iluma) generate 50% of its net revenues by 2025. And therefore they are able to conquer at least 40 million smokers in a few years. "The demands from the company have increased. Before, companies could sell a product without having to constantly improve it. Today we demand responsibility, and technological progress allows us to find solutions that were previously unthinkable. We have acted accordingly," he tells sportsgaming. .win Tommaso Di Giovanni, Philip Morris vice-president international communications.

The "cube" of Neuchâtel

The world of smoking The tobacco industry, according to Statista estimates, is worth more than 800 billion dollars and the trend towards 2025 is to continue to grow. However, the margins may not necessarily remain the same, since in the most advanced countries the rules have become more rigid, the perception of cigarettes in the collective imagination has changed, the health impact is devastating. In short, they are products that are increasingly difficult to manage and sell.

In developing countries the scenario is different. According to estimates by the World Health Organization (WHO), in the next three years smokers are destined to increase in Africa, the Eastern Mediterranean and Southeast Asia, and to decrease in America, the Western Pacific and Europe. Apart from Italy, since the Higher Institute of Health (Iss) in May reported that smokers increased by about 800 thousand units compared to 2019. 24.2% of the adult population smokes against 22% pre-pandemic.

Philip Morris does not go too far in admitting all the reasons that led her to change her strategy but emphasizes that she has "exploited technology and science to develop, evaluate and market less harmful alternatives to cigarettes". The line that the new generation products are more efficient in the fight against smoking than the mere application of restrictive rules.

The relationship with politics Di Giovanni recognizes that for the transition one cannot do without the support of politics and institutions: "In the United States they have evaluated the scientific material, drawn conclusions and agreed to a communication more punctual which allows the consumer to have factual information and consequently more confidence in new products ". Specifically, the Food & Drug Administration (Fda), the body that presides over health regulations, explains on its official website that "many studies suggest that electronic cigarettes and non-combustible tobacco products may be less harmful than combustible cigarettes. ", but also adds that" there is not yet enough evidence to support claims that e-cigarettes and other electronic nicotine delivery systems are effective tools for smoking cessation. " For this reason, Philip Morris' flagship product, Iqos, can already be labeled overseas with the wording "reduced exposure" of harmful substances.

The new iQos Iluma

The European Union in 2014, also based on US guidelines, created two categories for alternative products and a regulatory architecture that allows member states to organize authorization procedures and legislating on the subject. But other than that, it hasn't gotten out of balance yet. In Italy, caution is also greatest following the report on the Prevention and control of smoking drawn up by the Ministry of Health in 2020. "The evaluation report concludes that the available evidence does not seem to be sufficient to demonstrate that the use of the product in question is associated to an effective risk reduction ", reads the conclusions. Furthermore, the issue of nicotine remains suspended, which is still responsible for some diseases and causes addiction.

Another issue dear to the multinational is that of differentiated taxation, which according to Philip Morris could favor electronic cigarettes, as did the New Zeland. In countries with low average incomes, the idea is to offer the purchase of leased devices, as is done with mobile phones, diversify the offer with low-cost products and even disposable models.

Growth market Philip Morris said that in the first quarter of 2022 the e-cigarette segment exceeded 30% of total revenues, gaining nearly 3 percentage points in one year. There is now talk of a presence in 71 markets. They will become 100 within five years.

Philip Morris prototypes

The company has been working on devices that heat tobacco since the 1990s, but, as Di Giovanni admits, the tests on the sample groups were gone bad. Devices at the time were cumbersome due to batteries and the sensory experience was not adequate. Since 2008 Philip Morris has invested 9 billion in the segment, of which 120 million to create the research center in Neuchâtel. Virtually all research since last year has focused on this area.

The future Philip Morris also wants to diversify its activities. It recently acquired three companies that from 2025 should allow it to land in new markets. Pharmaceutical Vectura specializes in the development of spray inhalers for the treatment of respiratory diseases, such as asthma. Fertin Farma creates pharmaceutical products in the form of tablets and chewing gums. OtiTopic is developing an inhalable treatment of acetylsalicylic acid, a kind of cardioaspirin, which should act as an antithrombotic in about 30 seconds, compared to tens of minutes for a traditional tablet.

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