Philip Morris’s vision of cigarette-free future met with scepticism

30 November 2016:

Campaigners and analysts question Marlboro maker’s claims that new heat-not-burn iQos could see cigarettes phased out.

Claims by tobacco giant Philip Morris, the US company behind brands including Marlboro, that conventional cigarettes could become a thing of the past have been met with scepticism.

Speaking as he launched a new product that the firm claims is less harmful than traditional smoking, chief executive André Calantzopoulos predicted a “phase-out period” for cigarettes.

He said the company’s new iQos product, which heats tobacco but does not burn it, releases fewer toxins and is capable of replacing cigarettes in the long term.

“I believe that there will come a moment in time where we have sufficient adoption of this alternative product and sufficient awareness to start envisaging – together with governments – a phase-out period for cigarettes,” he told BBC Radio 4’s Today programme on Wednesday. “I hope this time will come soon.”

Philip Morris, the largest tobacco firm outside China, has invested $3bn (£2.4bn) in the iQos, which differs from vaporisers or e-cigarettes that heat a liquid containing nicotine.

The firm’s prediction of a future without cigarettes came as the UK court of appeal ruled that plans to remove distinctive branding from packs will go ahead.

But campaigners and industry analysts cast doubt on the chances of cigarettes being banished, either by e-cigarettes or other replacement products such as the iQos.

Deborah Arnott, chief executive of anti-smoking group Ash, said: “Philip Morris claims to be moving towards a post-smoking future but, like other tobacco companies, it is still actively promoting smoking around the world, using methods that would be illegal in the UK.”

Rae Maile, tobacco industry analyst with City of London firm Cenkos Securities, pointed out that Calantzopoulos was vague about how long it might take for cigarettes to disappear.

“He didn’t say when … so it’s any time in the next century,” he said. “There are 1 billion people quite happy with smoking. Cigarettes are easy to use, convenient and don’t need recharging. People know the health risks and are willing to accept them.

“There’s plenty of demand from current smokers so it might change, but it’ll be a very slow process.”

Despite the growing publicity surrounding vaporisers and e-cigarettes, they remain a nascent technology that forms only a tiny part of tobacco firms’ income.

Philip Morris, which has its headquarters in New York and runs its international operation from Switzerland, sold 847bn cigarettes in 2015 and had group revenues of $26.8bn (or $73.9bn including excise tax).

UK-based rival British American Tobacco makes e-cigarettes under the Vype brand and this month launched a competitor to iQos called glo.

But revenues from what it calls “next generation products” are still so small that the company does not publish them, describing income from the division as “not currently material”.

Imperial Tobacco also does not publish figures for vaporiser sales, while it is yet to launch a “heat-not-burn” product like iQos.

And while countries such as the US, UK, Italy and France have begun to embrace alternatives, the use of traditional cigarettes is still on the rise elsewhere.

In Indonesia, the percentage of the 258 million-strong population that smokes every day is projected to rise from 30.9% of adults in 2010 to 40.7% by 2025, or nearly 80% among men, according to World Health Organisation figures.

That compares with a predicted decline in the UK from 20.9% to 13.2% over the same period.

Maile said rising smoking rates in the developing world were partly the result of lower life expectancy reducing people’s fear of late-life diseases, as well the lack of social stigma attached to the habit.

He pointed out that even markets such as the US, where smoking rates are declining, offer attractive opportunities for companies such as British American Tobacco, which recently spent $47bn to buy out Reynolds American.

“If you look at the percentage penetration rate, it’s halved since 1970 from over 40% to 20%, but the number of smokers has stayed at 45 million because you’ve seen growth in the population,” he said.

Maile added that this pattern was replicated elsewhere, with markets such as Indonesia and north Africa expanding, even if population growth is not factored in.

While Calantzopoulos claimed Philip Morris was shifting away from cigarettes, he also defended the company’s role in smoking-related health problems.

. “I don’t think Philip Morris invented cigarettes. For us, it’s to offer our consumers the best product we can in a category that we all know is addictive and causes harm.

“Once we have the alternative, as we have today, we offer them the alternative and we will do everything we can to convince [people] to switch to these products.”

Arnott said independent evidence was needed to support any claims made by the tobacco industry that new products were safer.

“From past experience, nothing the tobacco companies say should be accepted at face value,” she said.

“Fully independent research and assessment will be crucial if iQos and related products are to be accepted as useful in fighting the smoking epidemic.”



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