Philip Morris International (PMI), the world’s leading tobacco company, is actively working on creating affordable smoke-free products aimed at offering alternatives for current smokers in Africa, as highlighted by a senior executive from the US-based multinational.
At the company’s Technovation event in Abu Dhabi, Frederic de Wilde, PMI’s president responsible for South and Southeast Asia, the Commonwealth of Independent States, the Middle East, and Africa, emphasized the opportunities present in Africa’s emerging smoke-free market, which is highly price-sensitive.
“Africa undoubtedly plays a crucial role, and we are committed to developing smoke-free products as alternatives for African smokers,” he stated.
However, he conceded that the pricing of PMI’s smoke-free products remains beyond the reach of many consumers across the continent.
“Initially, the smoke-free products we introduced were premium devices sold at premium prices. While we’ve achieved success in certain economies, in many countries within my region, only 5-10% of consumers can afford them,” he clarified.
To address this cost issue in Africa and other developing markets, PMI is focusing on more affordable smoke-free alternatives, de Wilde mentioned.
“We are innovating using heat-not-burn technology and are trialing a new, simpler device that targets the medium and low price segments. We also offer products in the e-cigarette category. This could emerge as one of the major successes in smoke-free alternatives within developing areas,” he noted.
Marlboro’s Vision for a Smoke-Free Future
Since 2016, PMI, which owns leading global cigarette brands such as Marlboro outside the US and Canada, has vowed to replace conventional 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, with the goal for these products to account for two-thirds of its total revenue by 2030.
Among its smoke-free offerings is the flagship IQOS, a heated tobacco device that creates a nicotine-containing aerosol without burning the tobacco. Further enhancing its smoke-free portfolio, PMI acquired Swedish Match in 2022, which de Wilde claims has gained traction among consumers in developing economies.
According to the company’s third-quarter earnings report, smoke-free products constituted 38% of total net revenues. The firm reported nearly 40 billion units shipped across 92 markets. Additionally, 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 approximately 1.3 billion people smoke cigarettes globally. Despite the widely recognized health risks of smoking, the US Centers for Disease Control and Prevention (CDC) reports that fewer than one in ten adult smokers successfully quit each year.
The number of tobacco smokers in Africa rose from an estimated 52 million in 2000 to 66 million in 2015, with forecasts predicting an increase to 84 million by 2025, according to a 2022 study published in the British Medical Journal. This trend positions the region as one of the few worldwide where the number of tobacco smokers is anticipated to rise.
Engaging with Skeptical Regulators
Despite the favorable market outlook for PMI’s smoke-free products in Africa, the regulatory and policy landscape across the continent remains intricate and challenging. Each country has adopted its own approach to tobacco regulations, leading to a fragmented market.
Additionally, some policymakers express hesitation towards smoke-free alternatives, often categorizing them with traditional cigarettes.
“In Africa and some developing areas, we find that governments are banning these products even before they reach the market,” de Wilde states.
Even when these products are allowed, obstacles remain regarding regulators’ views on smoke-free items, he adds.
“Authorities have not yet adopted a comprehensive harm reduction perspective in regulations; they frequently allow these products to enter the market but treat them like cigarettes.”
To build trust with regulators, it’s crucial to educate them on smoke-free products, de Wilde insists.
“Often, we encounter skeptics claiming there is no scientific foundation or independent research. This is incorrect. Those individuals should take the time to review the publicly accessible scientific information,” he asserts.
“Eleven independent state authorities have scrutinized our scientific research, 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 represents a significantly lower risk than smoking traditional cigarettes…E-cigarettes do not produce tar or carbon monoxide, two of the most harmful elements of tobacco smoke. Although the liquid and vapor include some harmful chemicals found in cigarette smoke, they are present at much lower levels.”
Nonetheless, the NHS cautions that “the long-term risks of vaping remain uncertain.”
New Offerings for Current Smokers
De Wilde stresses that a crucial aspect of gaining the trust of African regulators is to clarify that these offerings are not aimed at attracting new users but are designed for existing smokers to help reduce their health risks.
“These are innovations directed at current smokers. When we communicate with regulators and they understand the scale of the smoking population we are targeting, they tend to be more receptive,” he elaborated.
Increasing awareness among both authorities and consumers is vital to encouraging African smokers to switch to alternatives, de Wilde argues, pointing out the need for relaxed marketing restrictions on smoke-free products, which should not be treated the same as traditional cigarettes.
“Educating the public is the initial step. We can contribute, but authorities also need to play a part. As people become aware of the dangers of smoking, they should also learn about the new options available.”
“To ensure the public is educated about these alternatives, we need sufficient marketing freedom to connect with them, allow them to experience the products, and provide follow-up over several weeks,” he concludes.
