Yahoo Finance Marlboro maker calls for cigarette ban in Britain
Britain should treat cigarettes like petrol cars and ban them in 10 years’ time, bosses at the world’s biggest listed tobacco company have said.
André Calantzopoulos and Jacek Olczak, chairman and chief executive respectively of Philip Morris International, say a “carrot and stick” approach is required by the Government to force smokers to quit.
Mr Olczak said: “We can see the world without cigarettes. And actually, the sooner it happens, the better it is for everyone.”
Mr Calantzopoulos praised the UK’s “more progressive” approach to vapes and other products designed to wean people off smoking. He said a ban “could be one solution - but this is not enough”.
“Deadlines are important at a certain stage so people [companies] know how much horizon they have,” he said. “It is not different from what [is being done] with alternative energies or with electric cars... [But you need to] stop the confusion that currently exists in the minds of smokers.”
Mr Olczak added: “If you take the current usage or awareness of alternatives and remove this confusion - quite a lot of people actually, still think that alternatives are worse than cigarettes - and you also give them a choice of smoke-free alternatives... with the right regulation and information it can happen 10 years from now in some countries. And you can solve the problem once and forever.”
Philip Morris, the company behind Marlboro cigarettes, has faced a backlash from anti-smoking campaigners after launching a £1bn swoop for FTSE 250 drugmaker Vectura. The Chippenham-based firm develops drugs that combat smoking for the NHS.
Ian Walker, an executive director at Cancer Research said tobacco giants were positioning themselves “as part of the solution to a smoke-free world, all the while continuing to aggressively sell and promote lethal cigarettes globally.
“The industry has a long history of subverting tobacco control policies for its own financial gain, both in the UK and globally.”
Read on for our feature exploring the future of Big Tobacco
What comes next? That’s the burning question for Big Tobacco
With temperatures near freezing, a handful of IBM consultants filed into Philip Morris’s glass-fronted offices on the banks of Lac de Neuchâtel in north-west Switzerland.
As pharmaceutical specialists, they were intrigued by an appeal for help from one of the world’s biggest cigarette makers.
Bosses at Philip Morris International, creator of “Marlboro Man” after its popular cigarette brand, had been trying to find out the primary cause of smoking-related diseases.
The problem, the consultants were told at the 2004 meeting, was not tobacco or nicotine, per se. Instead it was burning, and the smoke that came with it.
“They had been looking to see what technologies could be used that could deliver what smokers are looking for: the satisfaction of nicotine, the taste and flavour, and the ritual that smokers like,” says one of the consultants.
“I came on to the project with a bunch of colleagues to basically re-engineer the R&D facility – and function much more like a pharmaceutical company.”
Earlier this month Philip Morris agreed a £1bn swoop for Chippenham-based drugmaker Vectura, which focuses on creating inhaler-based treatments for illnesses such as asthma and chronic obstructive pulmonary disease.
In light of the manoeuvrings by the Swiss-headquartered firm 17 years earlier, the only surprise for some insiders was that it had taken this long to do such a deal.
The backlash has been fierce, however. How could Philip Morris, the world’s biggest tobacco company, be allowed to buy a firm that provides medicines to the NHS to combat diseases caused by smoking, critics asked?
The company was accused of “buying into the heart of the pharmaceutical industry” by anti-smoking campaigners who urged the Government to intervene and block the deal.
Bosses at Philip Morris insist the Vectura deal is part of its goal to become a “wellness company”, and stated ambition in “delivering a smoke-free future”.
“Where do we go?” asks André Calantzopoulos, chairman of Philip Morris, venting his frustration at being told he cannot diversify into pharmaceuticals. “Then there are some other critics who are telling me alternatives to smoking, [the tobacco] industry shouldn’t be allowed to do.”
“So what I am left with is continuing selling cigarettes. We just get back to the point [that] we are actually trying to leave!”
The notion of Big Tobacco looking beyond cigarettes is not new.
Philip Morris has owned Miller Brewing and Kraft Foods – the latter floating as recently as 2001 in what was then the second-biggest stock market listing of all time.
British American Tobacco (BAT), London’s biggest listed tobacco company, owned retailers Argos and Saks Fifth Avenue in the 1970s and combined Eagle Star, Allied Dunbar and Farmers Group a decade later to form the UK’s biggest insurance group.
In recent years Big Tobacco has largely returned to its roots, with an arsenal of vaping, heated tobacco and nicotine pouch products. Pharmaceuticals appear to be the next frontier – at the moment only Philip Morris has delved into the sector.
Armed with gargantuan marketing budgets, health campaigners are sceptical of Big Tobacco’s intentions.
Ian Walker, an executive director at Cancer Research, is concerned that companies are positioning themselves “as part of the solution to a smoke-free world, all the while continuing to aggressively sell and promote lethal cigarettes globally”.
Big Tobacco continues to make big profits. BAT is this week expected to report £5.2bn of operating profit on £12bn of sales – an eye-watering margin that its FTSE 100 rivals could only dream of.
Ahead of this, Vuse, BAT’s vaping product, embarked on a publicity stunt on the River Thames. Laying claim to be the first carbon neutral brand of its type, a Vuse-liveried sailing boat passed through the gates of Tower Bridge – much to the chagrin of angry taxi drivers, whose diesel-guzzling black cabs pumped out noxious fumes as they stood idling.
Kingsley Wheaton, BAT’s chief marketing officer, understands the scepticism but insists companies like his are best placed to wean people off cigarettes.
He points out that although cigarette sales are falling, the number of global smokers – roughly 1.1bn – has remained static for some time.
“In 2012 I was handed a [World Health Organisation] forecast of the number of smokers by 2050, and it was ostensibly flat. Tobacco control policy of its day, and still of now, is the one of ‘quit or die’,” he says.
“And I don’t believe ‘quit or die’ is an effective public health policy. The effective policy is giving consumers alternative ways to enjoy tobacco, nicotine with less of the harm. And that’s what we’re doing.”
To prove the veracity of lofty straplines like “creating a better tomorrow”, industry critics say tobacco companies should either stop selling cigarettes, or at the very least sell off their cigarette-making arms.
The former idea will not solve the problem, says Wheaton. “If you take South Africa last year, we had a smoking ban for four-and-a-half months because of Covid; consumption didn’t decline at all. The void was just filled by counterfeit, contraband, smuggling and illicit traders.”
Selling off their business is also unappealing. “Not in the foreseeable future,” says Murray McGowan, strategy director at BAT’s FTSE 100 rival Imperial Brands. “Cash flow from our combustible business is absolutely fundamental to our ability to invest into the development of our [next generation products] business.”
Wheaton suggests a sell-off might not yield a good price. “You have to have willing buyers and willing sellers,” he says.
“And when we talk about ‘creating a better tomorrow’, we are talking about ‘creating a better tomorrow’ for multiple stakeholders. We have employees, we have society, we have consumers. And we do have a fiduciary responsibility to our shareholders.”
While only Philip Morris is pushing into the pharmaceutical sector, BAT and Imperial Brands have interests in cannabis derivatives, which are legal across Canada and parts of the US. Japan Tobacco International (JTI), with brands such as Benson & Hedges and Silk Cut making it the biggest cigarette seller in the UK, is more defensive.
A spokesman says: “We are a legitimate business in a legal industry just like beverage companies. They, like us, have introduced potentially less harmful products such as sugar-free or alcohol-free drinks to cater to changing consumer choices and lifestyles. As a legitimate company selling legal products, we should be able to provide adult consumers with innovative and potentially less harmful products.”
Critics like Walker are unconvinced: “The industry has a long history of subverting tobacco control policies for its own financial gain, both in the UK and globally, and so protecting public health from its vested interests is crucial.”
