Thursday, June 20, 2024

Investing in cigarette alternatives

Philip Morris International (PMI) has committed to developing a viable reduced-risk alternative to the combustible cigarette – a project in which it has already invested US$2 billion ($2.69 billion). 

Speaking to the BBC following the launch in Britain of iQOS – a smokeless cigarette described as a hybrid between analogue and electronic cigarettes – PMI CEO Andre Calantzopoulos said: “I believe there will come a moment in time where I would say we have sufficient adoption of these alternative products … to start envisaging, together with governments, a phase-out period for [combustible]  cigarettes.”

According to Euromonitor International, the total global vapour-products market reached a value of US$8 billion ($10.6 billion) in 2015 and an estimated 29 million people were regular dual or sole users of e-cigarette and vapour products globally that year.

Euromonitor International Head of Tobacco Research Shane McGuill says that for any alternative nicotine-delivery offering to be effective, both a substantial reduction in harm to the consumer and a profile that appeals to existing users of traditional cigarettes are required.

“In the iQOS, PMI clearly believes it has the potential to deliver on both requirements, but ultimately, the consumer will decide,” he said. “The comments [from Mr Calantzopoulos]  also raise the prospect of governments actively intervening to encourage transitioning to lower-risk products such as the iQOS – most likely either through differential taxation or regulation.

“It remains to be seen whether authorities will be willing to take such steps and, in all probability, official attitudes will vary.”

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