One of the biggest tobacco companies in the world, Phillip Morris have stated this summer that they’re moving away from selling regular tobacco and are making plans to cut down the number of customers smoking it. This is an unprecedented move when you think about how big Phillip Morris as a company is, with a total equity of 12 billion in 2014. The company has also been a seller of many brands of cigarettes dating back to the year 1900, 117 years ago. The company is responsible for brands such as Benson and Hedges, Marlboro, L & M and Merit and is one of the largest cigarette companies in the world. So, with such a history in the rear-view mirror, what is behind this shock reversal on over a century of business?
The Managing Director’s Statement
Peter Nixon is the Managing Director for Phillip Morris UK and has recently told the Independent Newspaper that one of the main objectives in the next few years is to see a slow move away from cigarettes. This statement means that they are trying to find alternative avenues for smokers, having finally given into anti-smoking lobbyists and years of controversies.
This move isn’t surprising, Phillip Morris, up until 2008, were one of the major players in tobacco advertising and therefore were hit hard when the laws on tobacco advertising came into effect. Over the past decade, Phillip Morris have been involved in lawsuits against entire countries, including damages to Uruguay after their full ban on smoking and against the UK when they introduced plain packaging in 2014. The company lost both cases and many more, since health took precedence over the infringement on Phillip Morris’s business freedom.
Why are they going back on themselves?
Objectively their aims to cut smoking seem contradictory after their long history. The reality is that Phillip Morris have recently developed heat not burn products such as IQOS which they are allegedly paying employees £50 commissions to convert regular smokers to. Peter Nixon has also claimed that he can stop 70% of smokers from using tobacco products altogether by converting them to heat not burn products.
Heat not Burn products – IQOS
Unlike e cigarettes, heat not burn products try to keep as like cigarettes as possible. The iQOS products come in packs of 20 and are essentially mini cigarettes attached to heating devices. Instead of heating with fire, they heat up electronically but differ from e cigarettes in that it is not e liquid you put inside but the “heet sticks” keeping it as similar an experience to cigarettes as possible. The similarity to e cigarettes is that they use a similar mixture of vegetable glycerine and water vapour but have cigarette tobacco inside the sticks, which are heated as opposed to burnt.
It is still unknown whether these devices will catch on with smokers or if they’ll even gain FDA approval, but the motivation behind Phillip Morris’s move away from cigarettes is in this new product, attempting to jump the restrictions on the tobacco industry.