Tag: Philip Morris International

Tobacco Recognized for Environmental Initiatives
CDP has recognized Philip Morris International, Japan Tobacco, Imperial Brands and Altria Group for their environmental leadership.
PMI received CDP’s “Triple A” score, recognizing the company’s environmental performance in tackling climate change as well as protecting forests and water security.
“External validation from organizations like CDP encourages us to continue on our journey to create a net-positive impact on society,” said PMI Chief Sustainability Officer Jennifer Motles, in a statement. “We are humbled PMI has received CDP’s Triple A distinction for a second time.”
Japan Tobacco made CDP’s A List for the third consecutive year.
“We are delighted to be included in the CDP’s Climate Change A List and Water Security A List for the third consecutive year,” said Kazuhito Yamashita, member of the board and senior vice president, chief sustainability, in a statement. “This clearly reflects our continued efforts to reduce our environmental footprint and expand our transparency in disclosing information.”
Imperial Brands made CDP’s climate change A List for a third successive year.
“We have a good track record in minimizing our impact on the environment and are committed to rapidly stepping up the decisive actions required to combat climate change,” said Imperial Brands Global ESG Director Tony Dunnag in a statement.
Altria was recognized by CDP for a second consecutive year with a double A rating for tackling climate change and protecting water security.
“We are committed to conserving the natural resources on which our businesses and communities rely,” said Jennifer Hunter, senior vice president, corporate citizenship at Altria in a statement. “As the latest science makes clear, the global community needs to quickly increase the ambition and progress of environmental targets, build climate resilient businesses and prepare for the net zero economy. Altria is committed to doing our part.”
CDP is a not-for-profit charity that runs a global disclosure system for investors, companies, cities and regions to manage their environmental impacts. Its process is acknowledged as the gold standard of corporate environmental transparency.
The organization’s full 2021 A List of companies is available here.
December 7, 2021
Spanner in the Works

Photo: Mariakray
A patent dispute derails the U.S. rollout of IQOS.
TR Staff Report
The deadline of Tobacco Reporter’s December print edition coincided with one for the U.S. Trade Representative to overturn a ruling preventing Altria Group subsidiary Philip Morris USA from importing Philip Morris International’s IQOS tobacco-heating device following a patent dispute.
On Sept. 30, the International Trade Commission upheld an initial determination that PMI’s IQOS device infringes patents owned by BAT. As a result of the ITC ruling, Philip Morris USA has been barred from importing PMI’s IQOS 2.4, IQOS 3 and IQOS 3 Duo heat-not-burn traditional cigarette products. It was also ordered to halt future sales of those products—marketed as Marlboro HeatSticks—already in the U.S.
Altria Group asked trade representative Katherine Tai to overturn the ban. Tai had 60 days to do so. By Nov. 30, however, the U.S. Trade Representative’s office confirmed to Bloomberg that no action had been taken by Tai, meaning the IQOS import ban stands.
BAT welcomed the development. “Today’s announcement provides a measure of success for our enforcement of intellectual property rights to ensure we can continue to innovate, as is common practice among innovation-based industries,” Gareth Cooper, BAT’s assistant general counsel, said in a statement. “As we have strenuously noted, there was no reason to overturn the policy.”
Altria expressed disappointment with the decision. “We continue to believe that the plaintiff’s patents are invalid and that IQOS does not infringe on those patents,” the company said in a statement.
“The ITC’s importation ban makes the product unavailable for all consumers who have switched to IQOS, reduces the options for the over 20 million smokers looking for alternatives to cigarettes and ultimately is detrimental to the public health.”
This sentiment was echoed by Gregory Conley, president of the American Vaping Association, at the time of the ITC’s Sept. 30 decision.
“By potentially denying them the opportunity to switch to a harm reduction production IQOS, the real losers of this protracted court battle could end up being American adult smokers,” Conley said.
“While some may use vaping, snus or pouches in the absence of IQOS, far too many American adults will choose to just smoke cigarettes instead.”
The U.S. Food and Drug Administration authorized IQOS for sale in April 2019. The products debuted in test markets in Atlanta in October 2019 and Richmond, Virginia, in November 2019. During the second quarter, Philip Morris USA expanded retail distribution of Marlboro HeatSticks into the Triad and other metro areas of North Carolina as well as northern Virginia and Georgia.
In immediate financial terms, the import ban has limited impact on PMI and Altria. IQOS in the U.S. is currently not a meaningful contributor to the companies’ earnings, according to Morgan Stanley. Nonetheless, IQOS is a key element in Altria’s shift away from traditional tobacco products, which have seen falling demand. To achieve its mission “to responsibly lead the transition of smokers to a smoke-free future,” Altria will need a viable alternative to combustible cigarettes in its portfolio.
Altria will likely appeal to the U.S. Court of Appeals for the Federal Circuit, which handles patent lawsuits. That process could take up to a year to reach a decision, with the likelihood of a successful appeal not favorable, according to industry analysts.
In the worst-case scenario for Altria and Philip Morris, the two companies would have to go back to the drawing board, moving production to the U.S. or changing up the design enough to avoid patent infringement claims.

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December 1, 2021
Altria Banned From Importing IQOS Into U.S.

Photo: Kuznietsov Dmitriy
The U.S. Trade Representative has upheld the International Trade Commission’s (ITC) finding that Philip Morris International’s IQOS tobacco heating device infringes on patents held by British American Tobacco, reports The Winston-Salem Journal.
As a result of the ITC ruling, Philip Morris USA is barred from importing PMI’s IQOS 2.4, IQOS 3, IQOS 3 Duo heat-not-burn traditional cigarette products. It also was ordered to halt future sales of those products—marketed as Marlboro HeatSticks—already in the U.S.
Some retailers of the Marlboro HeatSticks, including convenience stores, already had displayed notifications to customers that those products could no longer be sold as of Monday.
“Today’s announcement provides a measure of success for our enforcement of intellectual property rights to ensure we can continue to innovate, as is common practice among innovation-based industries,” Gareth Cooper, BAT’s assistant general counsel, said in a statement. “As we have strenuously noted, there was no reason to overturn the policy.”
Altria said expressed disappointment with the decision. “We continue to believe that the plaintiff’s patents are invalid and that IQOS does not infringe on those patents,” the company said in a statement.
“The ITC’s importation ban makes the product unavailable for all consumers who have switched to IQOS, reduces the options for the over 20 million smokers looking for alternatives to cigarettes, and ultimately is detrimental to the public health.”
This sentiment was echoed by Gregory Conley, president of American Vaping Association, at the time of the ITC’s Sept. 30 decision.
“By potentially denying them the opportunity to switch to a harm reduction production IQOS, the real losers of this protracted court battle could end up being American adult smokers,” Conley said.
“While some may use vaping, snus, or pouches in the absence of IQOS, far too many American adults will choose to just smoke cigarettes instead.”
The U.S. Food and Drug Administration authorized IQOS for sale in April 2019. The products debuted in test markets in Atlanta in October 2019 and Richmond, Virginia, in November 2019. During the second quarter, PM USA expanded retail distribution of Marlboro HeatSticks into the Triad and other metro areas of North Carolina, as well as northern Virginia and Georgia.
Altria will likely appeal to the U.S. Court of Appeals for the Federal Circuit, which handles patent lawsuits. That process could take up to a year to reach a decision, with the likelihood of a successful appeal not favorable, according to industry analysts.
In the worst-case scenario for Altria and Philip Morris, the two companies would have to go back to the drawing board, moving production to the U.S. or changing up the design enough to avoid patent infringement claims.
PMI has successfully defended similar cases in the U.K. and elsewhere. BAT has already pursued litigation over IQOS in Poland, the Czech Republic, Bulgaria, Romania and Greece and through the European Patent Office.
November 30, 2021
Consumer Confusion Preventing Cessation

Photo: kues1
Confusion about smokefree alternatives is preventing many smokers from quitting smoking according to a global survey, reports Arab News.
Commissioned by Philip Morris International and conducted by Povaddo, the study surveyed nearly 30,000 people in 26 countries. The researchers found that many adult smokers remain unaware that alternatives to cigarettes exist, are unable to access them, or are confused by conflicting information that prevents them from making an informed choice.
The survey showed that despite the science backing up smokefree alternatives, there was public confusion surrounding these products, such as heated tobacco products or e-cigarettes.
Thirty-three percent of the respondents cited a lack of information about how these products differ from cigarettes and 35 percent said they were unsure about the science behind these new products.
The survey found that 32 percent of smokers have easier access to cigarettes and so don’t switch to alternatives.
“The findings of the survey show there is confusion about smokefree products. For those adults who would otherwise continue to smoke cigarettes, having access to evidence-based information about smoke-free products is critical,” said Tarkan Demirbas, area vice-president for the Middle East at PMI.
According to the World Health Organization, there are more than 1 billion smokers in the world today, and this number is expected to stay steady until 2025.
November 22, 2021
PMI’s Di Giovanni Wins Communication Award

Tommaso Di Giovanni (Photo: PMI)

Philip Morris International’s vice president for market activation and support, Tommaso Di Giovanni, won the Gold Globee Award for “Communications Individual of the Year” at the 11th Annual 2021 Communications Excellence Awards. As the only gold award winner in the category this year, Di Giovanni was recognized for “Scaling communications encouraging honest dialogue and change in 100+ countries.”
“I am delighted to achieve this distinction, which reflects above all the hard and very collaborative work of our team and all our colleagues around the world, who daily share information and engage in dialogue,” said Di Giovanni in a statement.
“We can now replace cigarettes with better alternatives, and in some countries, this can be done in a matter of a decade or more. But, like any transformative vision, change needs to be explained and we have to face skepticism and misinformation,” Di Giovanni continued. “It is our collective responsibility to ensure people know the facts, understand who we are and what we stand for.”
PMI’s Internal Communications team also received a Gold Globee Award for “Communications or PR Campaign of the Year,” with the judges recognizing the company’s “enhanced engagement by rewiring internal comms during pandemic-era business transformation.” PMI created interactive content through varied internal communication platforms, including videos, roundtables, and podcast channels, to ensure continued connection with the worldwide workforce during remote working conditions.
“Philip Morris International aligned its internal communication strategy to its people-first culture to design influential communication programs during Covid-19,” said Bessie Kokalis Pescio, vice president of global internal communication, who won a Gold Globee Award as “Internal Communications Professional of the Year.”
The Globee Awards comprise 11 awards programs created to honor and recognize the accomplishments and contributions of companies, business executives, and professionals worldwide.
November 22, 2021
Olczak: PMI-Altria Merger off the Table

Jacek Olczak (Photo: PMI)
Philip Morris International is no longer pursuing a merger with Altria Group, reports Financial Times.
At the Financial Times Global Dealmaking Summit on Nov. 9 PMI CEO Jacek Olczak said that the “chapter with Altria is closed,” the newspaper reported.
PMI was spun off as a separate publicly traded company from Altria in 2008. Altria operates in the United States and PMI operates in non-U.S. markets.
Industry analysts and observers have speculated for years that the two companies might eventually reunite as they both look to diversify their product lines and offset slow declines in cigarette sales.
The two companies said in August 2019 that they were discussing a possible all-stock “merger of equals.” However, those negotiations ended a month later without any deal.
At the time, Howard Willard, then Altria’s chairman and CEO, said, “While we believed the creation of a new merged company had the potential to create incremental revenue and cost synergies, we could not reach agreement.”
During the recent Global Tobacco & Nicotine Forum in London, analysts said reunification of the companies was unlikely because of PMI’s public commitment to derive more than 50 percent of its net revenues from smoke-free products by 2025. Because Altria currently receives a smaller share of its earnings from such offerings than does PMI, it would be harder for the combined entity to meet PMI’s target, they noted. What’s more, many PMI investors like the fact that they can currently choose whether or not they want exposure to the uncertain U.S. market—an option that would no longer be available after any merger.
Altria holds exclusive rights to sell PMI’s IQOS tobacco-heating device in the U.S. However, the U.S. International Trade Commission ruled in late September that Altria and Philip Morris International must halt imports and sales of IQOS because it infringes two patents held by R.J. Reynolds Tobacco Co. The decision is under administrative review and could be overturned.
November 11, 2021
PMI Makes Case for IQOS at FDA

Photo: Lightfield Studios
Philip Morris International met with the U.S. Food and Drug Administration on Nov. 5 to present its argument for why the multinational and Altria Group should be allowed to import and sell the IQOS tobacco-heating device in the U.S., reports CNBC.
According to a CNBC source, PMI told the FDA that IQOS is unique in its ability to transition smokers away from combustible cigarettes, which the company says are more harmful to health than tobacco-heating devices.
In late September, the International Trade Commission ruled that IQOS infringed on two of Reynolds’ patents. The Biden administration is conducting an administrative review until Nov. 29 to decide if the sale and import of the cigarette alternative will be banned.
During the FDA meeting, PMI reportedly argued that the ITC overstepped its bounds, given that the FDA is in charge of regulating which tobacco products can be sold.
The U.S. Trade Representative will make a recommendation to President Joe Biden after listening to input from a number of agencies, including the FDA, which regulates tobacco products.
If the administration sides with R.J. Reynolds in the dispute, IQOS could be off of U.S. shelves for months as it waits for a decision on a separate claim from Reynolds with the U.S. Patent and Trademark Office.
PMI has successfully defended similar cases in the U.K. and elsewhere. BAT has already pursued litigation over IQOS in Poland, the Czech Republic, Bulgaria, Romania and Greece and through the European Patent Office.
In the worst-case scenario for Altria and Philip Morris, the two companies would have to go back to the drawing board, moving production to the U.S. or changing up the design enough to avoid patent infringement claims.
November 10, 2021
PMI Applauds Plan to Simplify E-Cig Licensing

Photo: DW labs Incorporated
Philip Morris International announced its support of the U.K. government’s plan to simplify the pathway to license electronic cigarettes and other inhaled nicotine-containing products as medicines in England.
“The U.K. already has one of Europe’s lowest smoking rates, supported by a high rate of smokers who have switched to better alternatives,” the company wrote in a press note. “This proposal makes the U.K. the first country in the world to encourage the medical licensing of e-cigarettes via prescription as a route to further lower smoking rates, particularly among low-income smokers.”
“The U.K. is a global leader in medicine, science and public health,” said PMI’s senior vice president, of external affairs, Gregoire Verdeaux. “Expert scientific reviews in the U.K. and U.S. are clear that smoke-free alternatives—such as e-cigarettes—offer adults who would otherwise continue to smoke cigarettes a better alternative. We welcome the U.K. government’s continued recognition that regulated e-cigarettes and other inhaled nicotine-containing products, while not risk-free, are less harmful than smoking and can significantly benefit public health.”
PMI said regulators can decisively accelerate the decline of smoking through risk-proportionate regulations for all nicotine-containing consumer products. A growing number of countries—including the U.S., New Zealand, Italy, Portugal, Greece and Bulgaria—have recognized this approach and implemented differentiated regulation for noncombustible alternatives, according to the company.
November 3, 2021
PMI Invests in Growth Stage Companies

Photo: William W. Potter
Philip Morris International plans to dedicate a further $200 million to minority investments in early and growth-stage companies through PM Equity Partner (PMEP), PMI’s corporate venture capital arm. This allocation follows a 2016 commitment of $150 million that PMEP has since fully invested and is intended to support PMI’s smoke-free and beyond nicotine ambitions.
With this latest round of funding, PMI will leverage its strengths to help investee companies translate innovation into commercial success. Developed through PMI’s journey to replace cigarettes with smoke-free alternatives, the company’s best-in-class capabilities include advanced life science expertise, preclinical and clinical research, and aerosolization.
PMEP is focusing its investment activities on four distinct technology segments: life science innovations, such as inhaled therapeutics and computational research methodologies; industrial technologies like industrial robotics and automation, the internet of things and technology-based process optimization; product technologies, particularly those that relate to inhalation and aerosolization, chemical formulation and bio-authentication; and consumer engagement technologies, such as user identification and age authentication, innovative customer care and experience management.
“PMI’s scientific and technological leadership has enabled us to reinvent our company in our pursuit to ‘unsmoke’ the world,” said PMI Chief Financial Officer Emmanuel Babeau in a statement. “We are dedicating further funds to our venture capital arm at a moment when we are in an even stronger position to leverage our expertise to support the development and commercialization of cutting-edge technologies to the benefit of both PMI and investee companies.”
“PMEP is looking to invest in companies that can help PMI accelerate and further sophisticate our transformation while we support them through our industry-leading expertise to mature their technologies and businesses,” said Alexander Stoeckel, head of PMEP. “We see this exchange as a win-win for PMI, the companies we invest in and society.”
November 2, 2021
PMI Creates New Positions to Accelerate its Transformation

Photo: Vitezslav Vylicil
Philip Morris International is establishing a category management structure for its smoke-free and combustible cigarettes businesses to accelerate the delivery of a smoke-free future. Stefano Volpetti, currently PMI’s chief consumer officer, has been appointed president smoke-free products category & chief consumer officer. Werner Barth, currently PMI’s senior vice president commercial, has been appointed president combustibles category & global combustibles marketing.
“We are introducing a category management structure to further unlock and enhance PMI’s growth as the company accelerates toward a smoke-free future, ensuring that we remain focused, delivering on what matters, seamlessly—faster, with better quality, and improved cost,” said PMI CEO Jacek Olczak in a statement. “Stefano and Werner are leaders of exceptional caliber, and I have every confidence that they will succeed in their new roles, working closely together to achieve a smoke-free future.”
“Establishing a global end-to-end category view will be fundamental in further driving our smoke-free products’ growth trajectory, fostering consumer centricity, and leveraging the strengths of our markets and regions as we work together to deliver on our smoke-free future ambitions,” said Volpetti.
“The new structure will be paramount in achieving our financial and non-financial targets over the next several years, helping us maintain our competitive position in the cigarette market, which in turn best positions us to significantly accelerate our smoke-free journey,” added Barth.

Establishing a global end-to-end category view will be fundamental in further driving our smoke-free products’ growth trajectory, fostering consumer centricity, and leveraging the strengths of our markets and regions as we work together to deliver on our smoke-free future ambitions.
Stefano Volpetti
Both leadership appointments will be effective Nov. 1, 2021. The new category management structure ensures greater end-to-end accountability from development to deployment, with the continued cooperation of relevant functions such as product, life sciences, operations, and IT. Volpetti and Barth will become the strategic owners of each category and will work with the regions and markets to achieve PMI’s business targets. PMI’s six regional presidents will continue to report to the CEO.
Volpetti is a global leader with consumer expertise and a track record of transforming brands in complex business environments. Volpetti joined PMI in 2019 as chief consumer officer, driving consumer centricity through the function to deliver “fit-for-use” solutions for market deployment that cover the entire realm of the IQOS brand building, innovation, services, and omnichannel experience. Before joining PMI, Volpetti worked at Procter & Gamble for 22 years, where he progressed through various roles with increasing responsibility, including as a vice president and brand franchise leader for a global division with presence in more than 100 markets. He also worked at Luxottica Eyewear as chief marketing officer in 2015, gaining valuable exposure to retail operations.

The new structure will be paramount in achieving our financial and non-financial targets over the next several years, helping us maintain our competitive position in the cigarette market, which in turn best positions us to significantly accelerate our smoke-free journey.
Werner Barth
Barth is a PMI stalwart with a deep knowledge of the business, recognized for his courageous leadership, strategic thinking and broad business expertise. As PMI’s senior vice president, commercial, a position he held since 2018, Barth built a strong downstream organization, instilling consumer centricity and ensuring seamless deployment of products and programs. Barth joined Philip Morris Germany in 1990 as a trainee, and since then has built his career through key assignments. He was appointed director marketing Spain in 2002 and then director sales Germany & Austria in 2004. In 2007, he was appointed managing director Benelux. He was promoted to managing director Germany & Austria in June 2011. In April 2015, Barth was appointed senior vice president marketing & sales.
Since the launch of PMI’s first smoke-free product IQOS in 2014, the company has made significant progress in reinventing its operating model and expanding its organizational capabilities, while continuing to deliver strong business results. PMI’s smoke-free products are available in 70 markets as of Sept. 30, 2021, and generated approximately 29 percent of the company’s total net revenues in the third quarter. By 2025, PMI aspires to have its smoke-free products available for sale in 100 markets as of year-end and to generate more than half of its total net revenues for the full year.
October 27, 2021