They may have had a tough month, but tobacco giants Philip Morris International (PMI) have won a small but significant victory in the marketing battle over their flagship heat-not-burn product.
In New Zealand, the Ministry of Health decided against appealing the decision by a Wellington court earlier this year which gave the green light for electronic cigarettes to be imported, sold and distributed.
That includes the IQOS – PMI’s heat-not-burn creation which they hope will play a crucial role in the company’s long-term future.
The IQOS – which already has 5m users worldwide – works by heating tobacco to around 350C, which is significantly lower than the 800C of a traditional cigarette.
PMI launched the action to protect the IQOS in New Zealand, with the court finding that all tobacco products — barring chewing and dissolving ones — could be lawfully sold under the Smoke-free Environments Act.
And with the Ministry of Health announcing that they would not contest the decision, it has effectively legalised electronic cigarettes and heat-not-burn products in the country.
That is significant for several reasons. Primarily, it opens up the New Zealand market for the likes of PMI and their alternatives to traditional tobacco smoking.
With tobacco sales plummeting in the developed world, securing access to another market could be key for the future of heat-not-burn.
It also heaps pressure on Australia, where electronic cigarettes are banned.
New Zealand’s neighbour also has high taxation on tobacco and strict regulations regarding its advertisement.
Yet with recent data suggesting expenditure on tobacco products is actually on the rise there, it is hoped that New Zealand’s U-turn could prompt a national review of the nation’s anti-smoking strategy, potentially opening up another market for PMI.
There are also hopes it could influence the US, where the IQOS is not for sale due to concerns from the Food & Drug Administration (FDA).
Whether the events in New Zealand make any difference or not remains to be seen.
The FDA has cast aspersions on claims that the IQOS is significantly less harmful than traditional tobacco smoking.
Their findings came despite encouraging results from both Germany and the UK. Recently, Germany’s Federal Institute for Risk Assessment revealed that the IQOS dramatically reduced the intake of harmful organic compounds.
And in the UK, the independent Committee on Toxicity of Chemicals found it exposed users to between 50 and 90 per cent fewer ‘harmful and potentially harmful compounds’ found in traditional cigarettes.
Regardless of what happens in the US though, the events in New Zealand come as a welcome boost for the tobacco giants.
In April, their stock value took a hit following weaker-than-expected figures for the IQOS in Japan, where the product has been marketed heavily.
That those results had such a profound effect on PMI illustrates just how crucial the IQOS is to their future.
And, with that in mind, the news from New Zealand will be very welcome indeed.
Leave a Reply