In the next 10 years, Philip Morris International (known for producing Marlboro cigarette) CEO Jacek Olczak announced that the company will stop selling cigarettes in the UK. He went even further, adding that his company was striving for a world without cigarettes, stressing that the sooner this happens, the better for everyone.
He wants cigarettes to be treated like petrol, like petrol in a car. The car ban comes in 2030.
For decades, companies like Philip Morris have been at the forefront of promoting tobacco worldwide. Imagine you want to stop selling cigarettes and ask the government to ban them. If that seems counterproductive, welcome to the club.
And they were ruthless at times. At one point, they launched an academic smear campaign to push for restrictions on cigarette sales. Then came the cigarette companies, who actually wanted to stop selling cigarettes. But then there was a sudden change of heart.
In many developed countries, the habit of smoking cigarettes is on the decline. Older smokers quit and fewer young people recognize the appeal of smoking.
Continued pressure from non-governmental organizations, public health stakeholders, and governments has come together over the years to harm the big tobacco companies.
States in the US have sued cigarette companies for billions of dollars. Bankruptcies are commonplace when the industry’s biggest players consolidate to stay alive.
Regulatory changes, tax increases, and a general aversion to smoking have made life difficult for cigarette manufacturers. The only other thing that protects their finances is… well, nothing. They have raised prices for a while to keep the cash flow intact. This is where Philip Morris comes in.
In fact, it’s the only reason they want to move to greener pastures. These pastures are the e-cigarette market.
Since 2008, the company has invested more than $8 billion in the research and development of smokeless products and electronic alternatives to emit cigarettes instead of burning them.
Many people think that it is the nicotine in cigarettes that causes morbidity and mortality. But the company has made it clear that this is not the case. Nicotine is addictive, but it is not the primary cause of disease.
The best thing smokers can do, of course, is to stop using nicotine. The next best thing you can do is persuade billions of people to change their behavior by developing a product to which they can switch – but billions of people still smoke –. By eliminating combustion, you reduce the harmful chemicals that the product emits compared to cigarette smoke.
That’s what we did. We have said that we want people to quit smoking; we have said that we want them to move away from traditional cigarettes and towards heated tobacco products that we consider to be better alternatives. But anti-cigarette campaigners are not buying this narrative.
If they see that smoking habits and regulatory measures are positive, they will doubtless double cigarette sales. But current evidence seems to suggest that won’t happen. For the past six years, Philip Morris has earned 100% of its revenue from the sale of traditional cigarettes. That is what they do best, and that is what Big Tobacco does best.
The company’s new strategy seems to be working to some extent. In Japan, cigarette sales fell five times in a four-year period after the country introduced smokeless products. Today, the company earns about 30% of its net revenues from the sale of these products. It hopes to increase the share of these products to 50% by 2025.
Some companies believe that traditional cigarettes will disappear from the developed world in the next decade or two. But just because traditional cigarettes are disappearing doesn’t mean people like Philip Morris are disappearing. Instead, cigarettes increasingly resemble e-cigarettes.