PMI aims to provide cost-effective smoke-free products for African markets

Philip Morris International (PMI), the largest tobacco company globally, is working on developing affordable smoke-free products aimed at providing alternatives for current smokers in Africa, as stated by a top executive from the US multinational.

During the firm’s Technovation event held in Abu Dhabi, Frederic de Wilde, PMI’s president overseeing South and Southeast Asia, the Commonwealth of Independent States, the Middle East, and Africa, highlighted the potential within Africa’s emerging smoke-free market, which is sensitive to pricing.

“Africa certainly has a significant role, and we are dedicated to creating smoke-free products as alternatives for African smokers,” he mentioned.

However, he acknowledged that the pricing of PMI’s smoke-free offerings remains inaccessible to many consumers on the continent.

“Initially, the smoke-free products we launched were premium devices sold at a premium price. While we have seen success in certain economies, in many countries in my region, only 5-10% of consumers can afford them,” he explained.

To tackle this cost challenge in Africa and similar developing markets, PMI is working on more economical smoke-free options, de Wilde shared.

“We are innovating on the heat-not-burn technology and are testing a new, simpler device that is more affordable, aimed at medium and low price segments. We also have offerings in the e-cigarette sector. This could potentially become one of the biggest successes in smoke-free alternatives within developing regions,” he noted.

Marlboro’s Vision for a Smoke-Free Future

Since 2016, PMI, which has a portfolio of top global cigarette brands such as Marlboro outside the US and Canada, has pledged to replace traditional cigarettes in its markets with smoke-free products. The company has invested over $12.5 billion in research and development for smoke-free offerings since 2008, aiming for these products to comprise two-thirds of its total revenue by 2030.

Among its smoke-free products is the flagship IQOS, a heated tobacco device that produces a nicotine-containing aerosol without burning the tobacco. Additionally, PMI’s acquisition of Swedish Match in 2022 has further enriched its smoke-free portfolio, which de Wilde claims is generating interest among consumers in developing economies.

In the company’s third-quarter earnings report, smoke-free products made up 38% of total net revenues. The firm reported nearly 40 billion units shipped across 92 markets. Meanwhile, PMI secured 24.2% of the international cigarette market for the third quarter, with a shipment of 163.2 billion cigarette units, marking a 1.3% increase compared to the same period last year.

The World Health Organization (WHO) estimates that around 1.3 billion people smoke cigarettes worldwide. Despite the well-known health risks associated with smoking, the US Centers for Disease Control and Prevention (CDC) reveals that less than one in ten adult smokers are able to quit annually.

The number of tobacco smokers in Africa rose from an estimated 52 million in 2000 to 66 million in 2015, with projections indicating an increase to 84 million by 2025, according to a 2022 study published in the British Medical Journal.

Engaging with Skeptical Regulators

Despite the promising market prospects for PMI’s smoke-free products in Africa, the regulatory and policy frameworks across the continent remain complex and challenging. Each country has adopted its own stance on tobacco regulations, resulting in a fragmented environment.

Moreover, some policymakers express hesitancy regarding smoke-free alternatives, often grouping them with traditional cigarettes.

“In Africa and certain developing regions, we observe that governments are prohibiting these products even before they hit the market,” de Wilde mentions.

Even when the products are permitted, challenges persist regarding regulators’ perceptions of smoke-free items, he adds.

“Authorities have not yet incorporated the overall harm reduction perspective into regulations; often, they allow these products to enter the market but treat them like cigarettes.”

Building trust with regulators involves educating them about smoke-free products, de Wilde argues.

“Often, we encounter skeptics who claim there is no scientific basis or independent research. This is incorrect. Those individuals should invest time reviewing the publicly available scientific data,” he states.

“Eleven independent state authorities have evaluated our scientific findings, including the FDA (Food and Drug Administration) in the US, which granted modified risk tobacco product authorization.”

The UK’s National Health Service acknowledges that using e-cigarettes is “not entirely risk-free, but it poses a significantly lower risk than smoking traditional cigarettes…E-cigarettes do not generate tar or carbon monoxide, two of the most harmful components of tobacco smoke. While the liquid and vapor contain some harmful chemicals found in cigarette smoke, they are at significantly lower levels.”

Nevertheless, the NHS warns that “the long-term risks of vaping remain unclear.”

New Offerings for Current Smokers

De Wilde emphasizes that a vital aspect of gaining the trust of African regulators is to convey that these products are not intended to attract new users but are designed for existing smokers, aiming to mitigate their health risks.

“These are new offerings targeted at current smokers. When we communicate with regulators and they grasp the magnitude of the smoking population we are addressing, they tend to be more open-minded,” he explained.

Raising awareness among both authorities and consumers is essential for encouraging African smokers to transition to alternatives, de Wilde argues, highlighting the need for relaxed marketing restrictions on smoke-free products, which should not be treated like traditional cigarettes.

“Informing the public is the first step. We can contribute, but authorities must assist as well. When individuals become aware of the harms caused by smoking, they should also learn about the new alternatives available.”

“To ensure people are informed about these alternatives, we require sufficient marketing freedom to engage with them, allow them to try the products, and follow up over a few weeks,” he concludes.