The managing director of Phillip Morris, one of the biggest tobacco producers, stated in a morning show that smokers should give up traditional cigarettes in favor of e-cigarettes and heated tobacco products. He admitted that cigarettes kill 100,000 people in the UK annually and he takes that fact very seriously. The company is positioning itself for a future where people do not smoke traditional cigarettes. When asked why they just stop selling cigarettes, he responded by saying that smokers would just switch to another brand and put the company out of business. The company produces 800 billion cigarettes a year but aims to reduce that number in favor of less harmful products. An interesting fact in this article is that according to Phillip Morris, 80% of smokers who tried heated tobacco products quit smoking compared to only 30% of smokers who tried e-cigarettes. I believe this will be a trend with tobacco companies as peoples views of traditional cigarettes shift. After this announcement their share price increased by about 1% so it seems to be working out in their favor.
Source: https://www.ibtimes.com/philip-morris-boss-thinks-you-should-give-traditional-cigarettes-2775037
3 comments:
Interesting how a tobacco company is now sitting back and acknowledging what their products due to people. Stupid aside, when I visit Italy they make the cigarette packs say "SMOKING KILLS" very large on the front of the pack which is not what we see in the US. Now, seeing a company verbally state that cigarettes health effects are poor and that electronic ones are better is interesting. It's also a great way to boost electronic cigarette revenues. For the sake of the person, I do hope E-cigarettes become more common and lead to a healthier society.
Korean cigarettes also have the SMOKING KILLS slogan and also images of repulsively smoke-affected organs, etc. It is indeed fascinating how the biggest tobacco producing company is trying to make people not smoke the traditional products. Although I am not sure how healthier e-cigarettes or any other alternative tobacco products are, but hopefully these changes could affect the inelastic demand of cigarettes, for the sake of everybody's health.
This seems like a smart move to alter the trajectory of the company. With growing alternatives to traditional smoking being developed daily and a steady decline in PM stock price in recent years, adapting the firm to move in a new direction could be beneficial. He also comments that they wont just quit their main business as they enter new products, focusing on retaining their market share.
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