Tag: Philip Morris International

PM: Irish Menthol Ad Was A Mistake

Peter Nixon, managing director of Philip Morris for the U.K. and Ireland.
Photo: Dave Parker
Philip Morris has told Irish retailers it made a mistake in labeling its new Marlboro Bright brand as a “menthol blend’ in a trade press advertisement, reports The Irish Times.

The company introduced Marlboro Bright after menthol cigarettes became illegal across the European Union on May 20. The new brand replaces the company’s old Marlboro Green cigarettes.

Writing in Retail News, Peter Nixon, the managing director of Philip Morris for the U.K. and Ireland, said the advertisement should not have run.

The ad for retailers had described Marlboro Bright as “the Marlboro menthol blend—without methylation.”

Nixon said “methylation” was a typo that should have read “without menthol.” He insisted Marlboro Bright is a traditional cigarette without menthol and thus in compliance with the ban.

Public health advocates have been watching the tobacco industry’s actions closely in the wake of the EU ban. Earlier, Japan Tobacco International (JTI) was criticized for continuing to use menthol during the manufacturing process of its Silk Cut Choice Green brand.

JTI insisted this is legal as long as the additive does not result in a characterizing smell or taste in the cigarettes other than tobacco.

The Health Service Executive is investigating if any tobacco companies are in breach of the menthol ban.

The Irish market for menthol cigarettes was worth €250 million ($282.82 million) prior to the ban.
June 23, 2020
KPMG: EU Illicit Cigarette Market at Record Low
Photo: Tobacco Reporter archive
The European market for illicit cigarettes reached a record low in 2019, even as consumption of counterfeits continues to grow, according to a KPMG study commissioned by Philip Morris International (PMI).
In 2019, EU consumers purchased 38.9 billion illicit cigarettes—the lowest number since the KPMG study first took place in 2006. The figure represents represented 7.9 percent of total EU cigarette consumption, 0.7 percentage points less than in the previous year.
Despite the overall decline of illicit cigarette consumption, which continued for the seventh consecutive year, the consumption of counterfeit cigarettes continued to grow, reaching 7.6 billion, a 38.3 percent increase compared to 2018 and the highest level recorded to date.
“The continued decline of illicit tobacco trade in the EU is a positive development and reinforces the importance of supply chain control measures, strict enforcement, and collaboration in combating this issue,” said Alvise Giustiniani, vice president of illicit trade prevention at PMI.
“We must remain focused on these collective efforts, as there continue to be worrying trends like the increase of counterfeit cigarettes and the persisting problem of illicit whites. The first ever EU-wide tracking and tracing system that was introduced last year under the European Tobacco Products Directive is an important tool for law enforcement and one that we should continue to enhance through close collaboration and information-sharing to remain highly vigilant on emerging risks.”

Graphic: KPMG
According to PMI, illicit trade undermines efforts to reduce smoking prevalence and makes unregulated tobacco products easily accessible. “For PMI to deliver a smoke-free future and enable millions of people who would otherwise continue to smoke to switch to better alternatives to cigarettes, it’s essential to eliminate illicit tobacco trade wherever it exists,” the company wrote in a statement.
Interviews with law enforcement conducted by KPMG as part of the study indicate that the manufacture of illicit whites and counterfeit cigarettes in illegal factories located in the EU is increasing. Insights from law enforcement also refer to emerging organized crime groups that specialize in the smuggling and sale of illicit raw tobacco.
Other report findings reveal that:
Counterfeit cigarettes represent 19.5 percent of total illicit cigarette consumption. Compared to 2018, the biggest increases in counterfeit consumption occurred in the U.K. (by 137 percent, to 2.1 billion cigarettes) and France (by 82 percent, to 840 million cigarettes).
Illicit whites continue to be a major element of illicit cigarette consumption, representing 35.6 percent of illicit consumption in the EU, or 13.8 billion cigarettes, up from 29.8 percent in 2018.
For the first time since the research began in 2006, counterfeit cigarettes and illicit whites represent more than 50 percent of total illicit cigarette consumption in the EU.
The countries with the largest volumes of illicit cigarette consumption in the EU were France, with 7.2 billion illicit cigarettes, and the U.K., with 5.5 billion illicit cigarettes.
The highest shares of illicit cigarette consumption were found in Greece (22.4 percent), Lithuania (17.7 percent), and Ireland (17.5 percent). Compared to 2018, both Greece and Ireland saw a declining trend in illicit cigarette consumption, while Lithuania marked a slight increase.
Illicit flows from identifiable markets outside the EU, such as Ukraine and Belarus, continued to decline. However, illicit products reportedly originated from within the EU—and destined to another EU country—increased in 2019.
June 19, 2020
Australian Regulator Rejects Tobacco Heating Products

Photo: PMI
Australia’s Therapeutic Goods Administration (TGA) on June 10 in an interim decision rejected a request by Philip Morris Australia to adjust nicotine regulations in a manner that would allow the company’s heat-not-burn product (HTP) reach store shelves.
Currently, only combustible tobacco products such as cigarettes and cigars are permitted to be sold in Australia.
Philip Morris (PM) spokesperson Simon Breheny called the decision disappointing. “It puts Australia at odds with many other countries who have decided to regulate heated-tobacco and smoke-free alternatives,” he said.
“The right decision was made,” said Becky Freeman, a researcher from Sydney University’s School of Public Health. “They [HNB products] are not some miracle product that reduces smoking.”
While Breheny noted that PM will not challenge the interim decision, he maintained that a regulatory mechanism is the appropriate way forward. “People who are looking for these alternatives will continue to make the case for why they are important,” he said.
The TGA is scheduled to release its full final decision in August.
June 12, 2020
Marc Firestone to Retire; PMI Appoints Successor

Marc Firestone | Photo: PMI
Suzanne Rich Folsom
Photo: Manatt, Phelps & Phillips
Philip Morris International (PMI) has appointed Suzanne Rich Folsom to the position of senior vice president and general counsel, leading legal, ethics and compliance, effective July 1, 2020. She succeeds Marc Firestone, who will retire later this year. Since January 2018, Firestone has held a dual role at PMI: president, external affairs and general counsel. He will continue to lead the company’s external affairs function until a successor is appointed.
Folsom comes to PMI from Manatt, Phelps & Phillips, where she co-chaired the investigations, compliance, and strategic response group and was a member of the government & regulatory and cyber & privacy groups. Before that, she was the general counsel, chief compliance officer, and senior vice president, government affairs and global public policy at United States Steel Corp. Previously, she held leadership positions with a number of global entities, including AIG, ACADEMI and the World Bank, and served in key roles for several heads of state and their families. Folsom holds degrees from Georgetown University Law Center and Duke University.
In her new position based in Lausanne, Switzerland, Folsom will report to PMI CEO Andre Calantzopoulos. Leading the legal, ethics and compliance teams, she will be an ambassador for the company across legal and regulatory environments; influence conversations aimed at creating a climate of change for better consumer choice as the company drives forward with its smoke-free transition; serve as counselor to PMI’s executive leadership team, board of directors, and other leaders; and build support for appropriate, risk-proportionate regulatory frameworks, among other functions.
“Suzanne Rich Folsom comes to us with a reputation as one of the most highly regarded and experienced general counsels and compliance and corporate governance specialists, having operated in very complex business environments,” said Calantzopoulos.
“Together with the board and our senior leadership, I extend enormous gratitude to Marc Firestone for all he has done for PMI,” he added. “A diplomatic statesman beyond compare, Marc has been the external face of PMI, serving as the embodiment of our ethical values and liaising with governments and regulators to inject common sense into the debate around tobacco.”
June 11, 2020
PMI Presents at Deutsche Bank Conference

Jacek Olczak | Photo: PMI
Philip Morris International (PMI) says it is on-track to deliver second quarter reported diluted earnings per share toward the upper end of its previously communicated range of $1 to $1.10. The forecast includes an unfavorable currency impact, at prevailing exchange rates, of approximately $0.07 per share compared to an unfavorable impact of approximately $0.12 per share communicated previously.
The forecast assumes a currency-neutral net revenue decline—wholly attributable to Covid-19-related factors—around the high end of the company’s previously communicated decline range of 8 percent to 12 percent.
According to PMI, this primarily reflects industry cigarette volume declines at the high end of the company’s initial estimates due to stricter or longer lockdowns in certain Latin America and EU markets during April and May. PMI has observed, however, better-than-anticipated IQOS performance and, in recent weeks, signs of recovery for combustible products.
The forecast also assumes no disruption in the company’s ability to supply its customers based on its current operations and inventory levels.
PMI Chief Operating Officer Jacek Olczak and Chief Financial Officer Emmanuel Babeau address investors today at the Deutsche Bank Global Consumer Conference. An archived copy of the call will be available at http://www.pmi.com/2020deutschebank until 5 p.m. Eastern time on July 10, 2020.
The company will issue its 2020 second-quarter results on July 21.
June 11, 2020
Tobacco Firms Defend Donations

Photo: Pogonici | Dreamstime.com
Philip Morris International (PMI) and Imperial Brands have hit back at allegations they are using the Covid-19 health crisis to improve their public image and gain access to politicians, reports Euronews.
Earlier this year PMI subsidiary Papastratos donated 50 respirators to help Greek hospitals cope with the pandemic. The Romanian Red Cross received a financial donation—reported to be $1 million—from PMI. PMI and Imperial Tobacco both donated money in Ukraine.
Critics denounced the gestures, suggesting they were part of a PR effort to lobby governments to loosen tobacco controls. They also said that the donations contravene the World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC).
PMI and Imperial Tobacco denied wrongdoing.
“Imperial Tobacco Ukraine, as a prominent employer in Kyiv, was asked to donate one ventilator to the hospital by the regional authority and other local groups,” the company told Euronews.
“The business was happy to do so and did not seek any publicity. It is clear that no regulations have been breached and to be criticized for agreeing to support the Kyiv community in these challenging and unprecedented times is a disgrace,” Imperial Tobacco Ukraine wrote.
Nataliya Bondarenko, external affairs director at Philip Morris Ukraine, noted that the FCTC does not prohibit interactions between commercial operators and government organizations. Instead, she said, it asks parties to protect public health policies from the tobacco industry’s commercial and other vested interests.
“This provision implies that regulators should act with impartiality and transparency,” said Bondarenko. “Our donation was done in full compliance with the law, demonstrating our integrity and transparency.”
June 9, 2020
PMI declares dividend, participates in Consumer Conference

Photo: Philip Morris International
Philip Morris International (PMI) has declared a regular quarterly dividend of $1.17 per common share, payable on July 10, 2020, to shareholders of record as of June 22, 2020. The ex-dividend date is June 19, 2020.
PMI will also host a live audio call of a presentation and question and answer session by Jacek Olczak, chief operating officer, and Emmanuel Babeau, chief financial officer, at the Deutsche Bank Global Consumer Conference on June 11, 2020, at approximately 7:00 a.m. Eastern Time.
The call will be held in a virtual format and provide a live audio of the entire PMI session in a listen-only mode. Participants can register at PMI’s website to receive dial-in instructions and numbers.
June 5, 2020
PMI Investigated for Tobacco Heating Patent Infringement

Photo: R.J. Reynolds Vapor Co.
The U.S. International Trade Commission (ITC) has opened a probe into vapor products imported by cigarette giant Philip Morris USA (PM) after R.J. Reynolds complained that PM’s tobacco-heating system infringes Reynolds’ patents, according to a report by Law360.
The investigation will determine whether the IQOS tobacco vaporizers marketed by Philip Morris and parent company Altria use tobacco-heating systems and sticks that violate patents for R.J. Reynolds’ Vuse vaping system. R.J. Reynolds seeks cease-and-desist orders barring imports of the allegedly infringing products.
The patents describe a device that heats tobacco held in a removable cartridge to 350 degrees when vapors containing nicotine are released without producing smoke, according to R.J. Reynolds’ April 9 complaint to the ITC.
R.J. Reynolds, which is owned by British American Tobacco, said Philip Morris has sold the alleged copycat IQOS system in the U.S. since October 2019 and has imported the product from manufacturers in Italy, Switzerland and Malaysia for years to use in clinical testing.
“We believe the allegations are without merit, and we are fully prepared to defend ourselves,” Philip Morris spokesman Corey Henry told Law360 in a statement Wednesday, noting the company has spent $7 billion developing its smoke-free tobacco products over the past two decades.
R.J. Reynolds filed a suit accusing Altria and Phillip Morris of six counts of trademark infringement in Virginia federal court the same day R.J. Reynolds filed its ITC petition. In that case, the company seeks treble damages and court declarations that Altria and Philip Morris have infringed its intellectual property.

Photo: PMI
May 18, 2020
CEO Upbeat About PMI’s Prospects Despite Crisis

Andre Calantzopoulos | Photo: PMI
Despite the uncertainty created by the coronavirus crisis, CEO Andre Calantzopoulos expressed confidence in the midterm outlook for Philip Morris International (PMI) during the company’s 2020 annual meeting of shareholders.
“Our main focus at this time is on the health and well-being of our employees, their families and the communities in which we operate,” said Calantzopoulos.
“The strong, underlying performance of our business, especially the impressive growth of reduced-risk products, was evident in our full-year 2019 and first-quarter 2020 results. However, there is considerable uncertainty as to the development and duration of the Covid-19 pandemic and its economic and social consequences, including those which impact our operating environment and our consumers.
“We remain confident in our structural midterm growth prospects and, when the current headwinds have passed, expect to resume growth consistent with our 2019 to 2021 currency neutral compound annual growth targets. Crucially, our organization, liquidity and balance sheet are strong. We will continue to protect and support our employees, serve our consumers and reward our shareholders, which includes our strong commitment to our dividend.”
This year’s shareholders meeting was held in virtual format only.
An archived copy of the webcast will be available for approximately one year from the date of the meeting. Presentation slides and script will also be available.
May 7, 2020
PMI and KT&G Announce Cooperation

KT&G CEO Baek Bok-in (left) and PMI CEO Andre Calantzopoulos celebrate their companies’ agreement to commercialize KT&G’s next-generation products internationally. (Photos courtesy of KT&G)
Philip Morris International (PMI) will commercialize KT&G’s smoke-free products outside of South Korea under the terms of a new agreement.
“To achieve PMI’s vision of a smoke-free future, we must grow the smoke-free category worldwide, which requires multiple players providing a wide array of better choices for adult smokers,” said Andre Calantzopoulos, PMI’s CEO. “While IQOS continues to be the leading product in the smoke-free category, and we plan to broaden our portfolio by launching IQOS MESH in the coming months, we believe that increased collaboration will benefit adult smokers by providing greater choice and drive accelerated adoption of smoke-free products worldwide.”
The agreement will run for an initial period of three years, allowing PMI to distribute current KT&G smoke-free products and their evolutions on an exclusive basis. It does not restrict PMI from distributing its own or third-party products.
KT&G is the leading tobacco and nicotine company in South Korea. Its smoke-free products include heat-not-burn tobacco systems (Lil Mini and Lil Plus), hybrid technologies that combine heat-not-burn tobacco and e-vapor technologies (Lil Hybrid) and e-vapor products (Lil Vapor).
PMI and KT&G will seek any necessary regulatory approvals for products that may be required on a market-by-market basis.
The agreement does not pertain to combustible products. There are no current plans to commercialize KT&G products in the U.S.
March 9, 2020