Manufacturer of Marlboro cigarettes switches to electronic cigarettes

February 3, 2014

Philip Morris International is looking for new markets on the back of negative forecasts for next year. Tobacco giant Philip Morris International has announced about start of manufacturing electronic cigarettes beginning with the next year. For this step Company was urged by reducing income growth rates and reduction of tobacco market.

One of the biggest tobacco Companies in the world, Philip Morris International will start manufacturing electronic cigarettes beginning with next year. General Director of the company Andre Calantzopoulos has declared it during conference in New York.

According to the Company data next year tobacco market, except USA and Canada where Company doesn't work will be reduced by 2-3%. Demand on cigarettes on developed markets gradually reduced but in EU and Russia it will fall by 7-8 % and 9-11 % correspondingly. Namely in these regions and also in Australia authorities do their best to reduce number of smokers. Here always prices on tobacco products are increased and are introduced high excise taxes what repulses both consumers and manufacturers.

Philip Morris International has already adjusted forecast for income level in 2014 and has declared that they will be higher than in 2013 by 6-8 %. With steady growth announced data doesn't achieve expectation of market experts. So, for example, Thomson Reuters analytics have supposed that Company will be able to increase its' profits in 2014 by 9 %.

Based on the above, management of tobacco giant decided to enter the most quickly developed industry segment - manufacturing of electronic cigarettes. As of yet total volume of this market slightly exceeds 2 billion USD what is a drop in the ocean as compared to 800 billion USD of tobacco market. However, according to Philip Morris International, it is "the main opportunity of growth" of Company's profits.

From the second half of next year manufacturer intends to start launching new series of products under brand Reduced-Risk, Andre Calantzopoulos has declared.

Electronic cigarettes have significant advantage as compared to usual: they are not subject to such severe sanctions from part of authorities of various governments but in some cases their sales are even encourages as possible way of smoking control.

At present moment take place arguments between supporters and opponents of electronic cigarettes. So, supporters of new type of cigarettes consider that they can help smokers gradually getting rid of nicotine dependence and quit smoking. Opponents on the contrary insist that electronic cigarettes are the same harmful as tobacco products. But for proving appropriateness of one or another point of view as of yet is not enough number of long-term researches.