PMI: New Tobacco Rules Will Choke Healthier Products

Philip Morris International, one of the biggest tobacco companies in the world, sees SA’s mooted tobacco regulations as an impediment to its plan to phase out its cigarette brands, such as Marlboro, in favou=r of healthier alternatives, Business Day reports.

The New York-listed cigarette and tobacco giant wants to ultimately replace all its cigarettes with new products that do not produce harmful smoke, such as e-cigarettes and its new iQOS range of devices that heat instead of burn tobacco.

However, the company said if it goes ahead in its current form, SA’s Control of Tobacco Products and Electronic Delivery Systems Bill will restrict the communication and marketing of all tobacco products, including e-cigarettes and products such as iQOS.

The bill includes provisions that introduce plain packaging and ban point-of-sale advertising and displays.

That means consumers may never know about new-generation products such as iQOS, which produce “90 percent less of the dangerous components” of traditional cigarettes, said Marcelo Nico, Philip Morris’s MD for Southern Africa.

“What we encourage government to do, and it’s in the submissions we made on the draft bill, is to separate the combustion burning of tobacco versus smokeless products like iQOS – they should be treated differently because this is part of the solution.”

The 7-million smokers in SA “should be given an alternative,” Nico told Business Day, adding that “progressive governments” in other markets had focused their regulations on harm reduction rather than blanket bans.

The Tobacco Institute of Southern Africa (Tisa) and the Vapour Product Association (VPA) have already warned of job losses if the bill is passed as is. They argue that the government should rather focus on stamping out the untaxed illicit cigarette market.

Illicit products cost the fiscus R27bn in lost revenue between 2010 and 2016, according to Tisa, which represents tobacco growers and manufacturers.

Nico said illegal cigarettes, which now account for nearly a third of all sales in SA, were “the single biggest issue for the industry.”

Meanwhile, he said Philip Morris wants at least 30 percent of its global volumes to come from smokeless products by 2025.

“In SA, our main effort is creating an SA free of smoke by offering these alternatives.”

As part of those efforts, Philip Morris plans to open a flagship store in Johannesburg to raise awareness among consumers. The group had also inserted notes in more than 10-million Marlboro packs this year to promote smokeless products, Nico said.

Since smokeless products use less tobacco, Nico said it is inevitable that demand for the plant would reduce over the long run. As such, the company is “working with” suppliers to educate consumers about alternative crops and other sustainability practices.

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