Philip Morris International is selling more cigarettes again. During the second quarter of the year, shipments increased, particularly in major smoking markets such as Turkey, Indonesia and Egypt. At the same time, the company’s smoke-free products are growing – and sales of its e-cigarettes rose by over 50 per cent, driven by markets in Europe.
Philip Morris International (PMI) reports continued growth for its smoke-free nicotine products. However, the company’s global cigarette shipments also rose during the second quarter of the year.
In total, PMI supplied 156.9 billion cigarettes during the quarter, an increase of 1.1 per cent compared with the same period last year. The company cites Turkey, Indonesia and Egypt in particular as the main drivers behind the increase.
At the same time, deliveries of smoke-free products rose by 7.5 per cent.
PMI: Smoke-free policies are affecting the cigarette market
PMI also comments on the differences between various markets. According to the company, the stronger performance in the cigarette market is primarily driven by large markets where smoke-free products are banned or still have a small market share.
In more developed markets for smoke-free products, however, cigarette sales are falling, according to the company.
At the same time, regulation varies considerably between the countries identified by the PMI.
In Turkey, the sale of e-cigarettes and heated tobacco products is prohibited. According to the Global State of Tobacco Harm Reduction (GSTHR), nicotine pouches are also not available on the regular market.
At the same time, the country has around 21 million smokers, equivalent to just over 30 per cent of the adult population.
”Ideology must take precedence over research”
The Canadian lawyer and public health campaigner David Sweanor has for many years argued that smoke-free nicotine products should play a greater role in efforts to reduce smoking. And, according to him, developments in Turkey, amongst other places, illustrate the problems of restricting access to smoke-free alternatives whilst cigarettes remain on the market.
”Ideology surrounding nicotine takes precedence over research, analysis, the search for truth and curiosity,” David Sweanor tells journalist Marc Gunther, who covers tobacco and nicotine issues via his Substack.
Indonesia permits smoke-free products
The situation is different in Indonesia, another of the markets that contributed to the increase in cigarette volumes as measured by the PMI.
The country has over 60 million smokers. Unlike Turkey, however, Indonesia permits the sale of e-cigarettes, heated tobacco products and nicotine pouches.
These products are subject to, amongst other things, taxes, age restrictions and other regulations.
There is now a legal market for e-cigarettes in Egypt too. According to the GSTHR, the country has nearly 20 million smokers.
Sales of e-cigarettes rose by 55 per cent
On the smoke-free side, e-cigarettes are showing a significantly faster rate of growth in percentage terms.
PMI’s shipments of e-cigarettes, mainly under the VEEV brand, rose by 55 per cent in the second quarter compared with the same period the previous year.
The company highlights Romania, Greece and Germany, amongst others, as key markets driving this growth.
All three are EU Member States where e-cigarettes may be sold in accordance with the EU Tobacco Products Directive. Among other things, this entails a maximum permitted nicotine content of 20 milligrams per millilitre, as well as requirements regarding product notification and health warnings.
Heated tobacco products are also sold legally in these markets.
42 per cent of revenue from smoke-free areas
PMI continues to sell large quantities of traditional cigarettes, whilst the smoke-free part of its business is growing.
During the first half of the year, smoke-free products accounted for around 42 per cent of the company’s net revenue. PMI includes, amongst others, IQOS, ZYN nicotine pouches and VEEV e-cigarettes in this category.
The company’s target is for more than two-thirds of its net revenue to come from smoke-free products by 2030.
At the same time, PMI highlights the differences between markets when assessing future cigarette sales. According to the company, the decline is more pronounced in markets where smoke-free products have had a greater impact, whilst the cigarette market is performing more strongly in several countries where such alternatives are banned or still have a small market share.
Globally, there are significant differences. According to GSTHR, just over half of the world’s adults live in countries where e-cigarettes may be sold. Cigarettes, on the other hand, may be sold to adults in all the countries included in the organisation’s survey.
