Philip Morris Feels The Heat And Burn
Philip Morris is under attack from health campaigners, shareholders and now politicians are upset with its advertising too.
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by Dave Cross
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Philip Morris is not just a company under product transition; it is one that is currently reeling from tumbling share prices (16% down) after posting its worst trading results for more than a decade. Traditional tobacco products are struggling, and growth for its heat-not-burn (HNB) product is flat lining in Japan and faces little enthusiasm in its major traditional markets.
Market commentators have noted that tobacco stocks are also being impacted by a growth in interest rates, rendering high-paying dividend stocks less attractive – and, on top of that, declining sales make these big dividends harder for the tobacco companies to pay.
Piper Jaffray analyst Michael Lavery said: “Uncertainty about the long-term outlook for PMI's iQOS business appears to be weighing on investor sentiment, and the company's remarks around the issue appear to have not added sufficient clarity.”
So, with this as a background, it’s possible to see the recent UK iQOS advertising campaign as symptomatic of a company thrashing about recklessly, desperate for increased sales volumes and willing (yet again) to flout rules that ban it from advertising its tobacco products.
Some wonder at the loathing tobacco companies inspire, especially those with a vested interest in HNB technologies, but its difficult to see how even they can defend Philip Morris’ latest actions. In many ways, it is like asking ex-drug addicts to remain friends with their dealers.
“It’s completely unacceptable for organisations to be promoting tobacco products,” said Public Health Minister, Steve Brine MP. “Smoking kills, and that’s why we have clear, strict rules in place protecting people from its harmful effects.”
He was addressing a situation that has seen Phillip Morris placing adverts into newsagent windows across Britain.
While some research says that HNB technology offers reduced risk over traditional tobacco cigarettes, albeit far less than the benefits conferred by vaping, it still uses tobacco – and this means the products are included in the long-standing ban on tobacco and tobacco-related product advertising.
Phillip Morris’ UK managing director Peter Nixon will have won himself no new friends when he said that the law doesn’t cover the iQOS because it doesn’t burn the tobacco. Should Phillip Morris be found guilty of transgression, Nixon faces a six-month stretch in prison.
ASH’s Deborah Arnott commented: “The legislation is very clear that advertising which has the effect of promoting tobacco products is illegal. That includes iQOS, just as it includes pipes used for smoking tobacco. It’s a barefaced cheek for Philip Morris to argue otherwise.”
Given Big Tobacco’s history for disregarding legislation, this latest action will prove a headache for those concerned about reducing cigarette harm. On one hand the iQOS does offer benefits – but the question remains, how much will the association with this morally bankrupt industry harm the reputation of any individual or organisation supporting these new HNB products?
Dave Cross
Journalist at POTVDave is a freelance writer; with articles on music, motorbikes, football, pop-science, vaping and tobacco harm reduction in Sounds, Melody Maker, UBG, AWoL, Bike, When Saturday Comes, Vape News Magazine, and syndicated across the Johnston Press group. He was published in an anthology of “Greatest Football Writing”, but still believes this was a mistake. Dave contributes sketches to comedy shows and used to co-host a radio sketch show. He’s worked with numerous start-ups to develop content for their websites.
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