Out for the Marlboro man
Those: pa/dpa/Soeren Stache
Cigarette manufacturer Philip Morris is focusing on innovative tobacco heaters for the future and is phasing out the classic tobacco cigarette. At the same time, the manufacturer calls for strict regulation of disposable e-cigarettes.
Dhe Marlboro man is on his last legs, at least when it comes to smoking. Because the manufacturer Philip Morris International wants to phase out the business with the classic tobacco cigarette and in future only offer tobacco heaters and electronic cigarettes for liquids.
“We will exit the cigarette business and only offer reduced-risk products,” said Markus Essing, CEO of Philip Morris in Germany and Austria, at an event in Berlin. The manager did not name a period for this. “We can set an end date, but have not yet defined one,” said Essing.
This distinguishes Philip Morris International from other large tobacco companies such as British American Tobacco, Reemtsma or Japan Tobacco. Since 2017, the company has stopped advertising tobacco cigarettes such as Marlboro and mainly focuses on the tobacco heater called Iqos. Because the tobacco is not burned in the device but heated, according to Philip Morris, there are 95 percent fewer pollutants.
In Germany, the Federal Office for Risk Assessment has confirmed that it is less harmful. However, the tobacco in the tobacco heater also contains nicotine and is just as dependent on the substance as a classic cigarette.
Outside the USA, the company holds the trademark rights to Marlboro and is the market leader in Germany with a share of 37 percent in classic tobacco cigarettes. The individual Marlboro brand alone has a 24 percent market share. New products like Iqos, on the other hand, currently have a sales share of five percent in the German cigarette market.
The corporations retain more than half of their pre-tax profit from sales
According to Philip Morris, around one million smokers will use the device. These proportions are significantly higher in countries such as Japan and Italy. According to the group, the sales share of the new products is currently 35 percent, and by 2025 it is expected to increase to 50 percent. Manager Essing does not name any figures. There is also no statement as to the extent to which sales of classic cigarettes such as Marlboro are declining at the same time.
It is true that sales of tobacco cigarettes in unit numbers in Germany are declining by an average of three percent a year. But the tobacco companies keep their profit margins high by raising prices. The corporations retain more than half of the pre-tax profit from sales.
From these profits, Philip Morris has so far invested around ten billion euros in research and development of new products. The center for this is in the Swiss town of Neuchâtel near Lausanne, where around 1,000 scientists are employed.
The topic of E-cigarettes just back for discussion. So-called steam cigarettes, in which liquids are heated and evaporated, are widespread in Germany. They contain flavors such as fruit and nicotine.
However, disposable e-cigarettes, which are sold for around ten euros online or at petrol stations or supermarkets, are new to the German cigarette market. The anger is sparked by the attractiveness of the product to young people and the harmfulness to the environment.
After all, these devices cannot be refilled with the liquids and end up in the garbage after use. The built-in lithium battery is problematic when it comes to disposal. Most of these disposable e-cigarettes are imported products from China, but tobacco companies such as British American Tobacco or Reemtsma have now entered the business.
Industry experts estimate that around five million of these disposable cigarettes are sold in Germany every month. Environmental groups and the federal government’s drug commissioner, Burkhard Blienert, are calling for these products to be banned. The Federal Council, with a majority of the federal states, has also requested that the federal government intervene.
The product is also popular among young people, mainly because of the low entry-level price and the sweet aromas used. In addition, the nicotine content is often not clearly stated.
Demand for strong regulation by the state
Tobacco manager Essing joins the ban demands in part and demands strong regulation by the state. “Philip Morris could easily launch such a product. However, we consider it to be extremely problematic and are therefore calling for regulation,” said Essing.
Disposable cigarettes appeal to young people and non-smokers simply because of their presentation. A deposit system for the return and disposal of disposable devices is necessary. In Germany, the Federal Minister for Agriculture and Food under Minister Cem Özdemir is responsible for the rules on the sale of such smoking products.
Restrictions on e-cigarettes could also come from the European Union. The EU is currently working on the next stage of the joint Tobacco Policy. Further advertising restrictions are conceivable, for example in social media for cigarettes. A uniform packaging is also under discussion, which only states the brand name on the box in addition to warnings. In this context, tobacco companies such as Philip Morris are demanding greater differentiation of products according to their harmfulness and health risk.
“Everything on shares” is the daily stock exchange shot from the WELT business editorial team. Every morning from 7 a.m. with our financial journalists. For stock market experts and beginners. Subscribe to the podcast at Spotify, Apple Podcast, Amazon Music and Deezer. Or directly by RSS-Feed.