Jacek Olczak, CEO of Philip Morris International (PMI), affirmed the company’s commitment to a smoke-free future and the goal of replacing cigarettes with science-based, smoke-free alternatives for adult smokers who would otherwise continue smoking.
Speaking at the Technovation Smoke-Free 2024 event in Abu Dhabi in December, Olczak highlighted PMI’s significant progress in innovation, underscoring the company’s substantial revenues while focusing on the development of less harmful alternatives to traditional tobacco products.
“Our annual revenues amount to $10bn, and we have invested more than $12bn in research, development, and production of our smoke-free products,” Olczak revealed. “These innovative products are now available in more than 90 markets worldwide. Innovation remains central to our strategy.”
He pointed out that globally, approximately one billion people smoke, many of whom are aware of the health risks but still do not quit. This reality fuels PMI’s mission to provide better alternatives, ensuring adult consumers have access to scientifically validated, safer options.
“We acknowledge that human behavior often resists change, but we remain committed to transforming our business to produce innovative, less harmful products,” Olczak said. He further emphasized that, according to the World Health Organization, the global smoking population is projected to grow due to population increases, despite ongoing anti-smoking policies and campaigns. While restrictions on tobacco marketing and higher taxes have reduced accessibility in some regions, overall smoking growth remains uncurbed.
PMI, he explained, is dedicated to transparency and providing adult smokers with all necessary information about their smoke-free products. This approach aligns with PMI’s commitment to offering better choices and ensuring that decisions are made based on complete knowledge of the facts, upholding both innovation and humanity’s principles.
Olczak disclosed that around 36.5 million adults globally now use PMI’s smoke-free products. He highlighted the company’s success in countries like Japan and Sweden, where the legalization of smoke-free products, including IQOS, has contributed to notable reductions in smoking rates. In Japan, the first market for IQOS, newly released public health data shows a 46% decrease in cigarette-smoking prevalence since 2014, dropping from 19.6% of all adults to 10.6% in 2022.
In the third quarter of 2024, smoke-free products accounted for 38% of PMI’s total net revenues, with IQOS surpassing Marlboro in revenue by late 2023, according to Olczak.
Regional Insights on Market Adoption
Andrzej Dąbrowski, Vice President for the Middle East and North Africa at PMI, noted that the use of smoke-free products is not solely dependent on a country’s income level. For instance, while Qatar, a high-income economy, does not allow smoke-free products, Egypt has been more receptive, with IQOS products accounting for 9.5% of the market share in Cairo. Dąbrowski also pointed to Lebanon, where PMI’s products maintain a strong presence despite the country’s economic challenges, and the UAE, which has embraced PMI’s smoke-free offerings. He emphasized that PMI remains open to discussions about its smoke-free products in all markets.
Collaboration for a Smoke-Free Future
Andrea Gontkovicova, Vice President of External Affairs for South & Southeast Asia, CIS, and the Middle East and Africa at PMI, shared her perspective on efforts to reduce the number of conventional smokers. She highlighted PMI’s range of smoke-free alternatives, including IQOS, first introduced in Japan in 2014.
“Non-combustible products can be tailored to suit everyone, but we need regulators to oversee these alternatives to traditional combustible products. We possess the alternatives, the science, and the experts focused on making this shift,” Gontkovicova said. She emphasized that every adult smoker should have access to alternative products, which must be readily available to meet their needs.
“Operating in more than 90 markets globally, we strive to offer better alternatives to everyone, everywhere. This is a priority for us, as 36.5 million adults around the world use alternative products,” she added. “This effort needs everyone involved.”
Industry Challenges and Consumer Preferences
Fred Roeder, Managing Director of the Consumer Choice Center, acknowledged that the nicotine market is evolving and that many consumers now prefer alternative ways of consuming nicotine.
Roeder noted that while several countries have adopted harm-reduction approaches for adult smokers, pricing remains a critical issue, as some nations impose heavy taxes on alternative products, making them less accessible. He pointed to the competition among products in the market, with some countries embracing less harmful alternatives and seeing positive outcomes, while others have rejected them.
“This divergence underscores the need for continued innovation and flexibility in addressing consumer needs and regulatory challenges,” Roeder explained. He also highlighted the challenge of educating smokers, particularly in emerging economies, where many adult smokers are unaware of the harmful effects of smoking. In such regions, the cost of smoking tends to be higher when alternative options are inaccessible, illustrating the profound impact of government policies on the adoption of harm-reduction innovations.
Roeder concluded: “In the coming generation, we are likely to witness a significant shift. We aim to remain neutral in terms of technology, acknowledging that many consumers prefer consuming nicotine in alternative ways.”
