Phillip Morris International tries lobbying against e-cigarette ban
Government cool to meeting efforts
Phillip Morris International (PMI), the manufacturer of Marlboro cigarettes, is actively lobbying the Thai government to reverse a ban on smoking alternatives like e-cigarettes and "heat not burn" tobacco products.
According to Phillip Morris Thailand’s managing director, Gerald Margolis, the company has met with the Ministry of Commerce and the Excise Department and has sent numerous scientific studies on the health advantages of smoke-free alternatives to the Ministry of Public Health.
He said Phillip Morris will continue lobbying efforts with the new government after a shake-up of ministers and high-level bureaucrats.
"We will continue to present fact-based, non-ideological studies and results from other countries with the government," Mr Margolis said. "It would be silly to make an electric vehicle regulation without consulting automotive manufacturers, so there should be dialogue with the tobacco industry when crafting tobacco regulation."
The company has had trouble getting a meeting with all relevant state ministries, such as public health.
There are 10.7 million smokers in Thailand as of 2017 (19.1% of the country) and despite a variety of anti-smoking regulations, the number of smokers has only dropped 4% in the past 13 years, or 0.3% per year. Although prices for cigarettes are relatively low, Thailand is one of the most restrictive markets for cigarettes, with bans on marketing and in-store displays, as well as plans to introduce plain, non-branded, packaging by the end of the year.
In Japan, the percentage of people moving away from cigarettes each year grew from 1.8% to 9.5% after the introduction of e-cigarettes and other smokeless products.
Mr Margolis said PMI wants to switch to selling smoke-free products exclusively "as soon as possible", although the company has no timeline for the transition.
While PMI sells smoke-free e-cigarettes, it is mainly promoting a heat-not-burn tobacco device that heats a small pod of tobacco just under the combustion temperature to create a vapour instead of smoke. The device produces 95% fewer toxic compounds than a normal cigarette.
PMI claims the heat-to-burn products have a higher conversion rate, with 70% of smokers fully transitioning away from cigarettes compared with e-cigarettes and other vapourisers that use tobacco-free, nicotine liquids. This is mainly because heat-to-burn devices allow users to ingest nicotine at higher rates than vapourisers, giving transitioning smokers a closer experience to a real cigarette.
The company claims this heat-to-burn product is not attractive to children, non-smokers and former smokers.
"We are adamantly opposed to any technology or new product that is attractive to non-smokers, so you don't end up with any products that have flavour, packaging or any other factors that will attract youth. We do this not just for our shareholders but for society as a whole," Mr Margolis said.
But studies show e-cigarettes are hugely popular with teenagers. A study from Dartmouth College estimated that from 2011-15 the number of high school students vaping in the US increased from 1.5% to 16%. The study estimated that in 2015 vaping helped about 2,070 smokers quit cigarettes, while conversely leading 168,000 teens and young adults to start smoking real cigarettes after using e-cigarettes.
Altria, the owner of Philip Morris USA, which spun off from PMI in 2008, has invested heavily in Juul, the massively popular cigarette startup valued at US$38 billion. Last year, Altria invested $12.9 billion in Juul, taking a 35% stake in the company and three seats on the board.
The tobacco industry is seeing major disruptions, both from companies like Juul that offer sleek designs and flavours popular with young people, but also from the rise of cannabis industry.
PMI is heavily invested in the future of tobacco, probably more so than the future of children, and heat-not-burn devices may be the best way to claim a market.
Public Health Minister Anutin Charnvirakul recently said he wants to make cannabis widely available and listed on the nation's "essential drugs list".
Cannabis is only legal for medical use at the moment, but with the government's enthusiasm to become the pot hub of Asia, predictions of recreational legalisation on the horizon may not be absurd.