Brussels – Philip Morris looks to the future and bets on combustion-free cigarettes. This was the thrust of the speech by Massimo Andolina, European president of the American tobacco giant, at the press conference on the economic impact (between 2019 and 2023) of the group in the European Union. “I expect that in ten years, several European countries will no longer sell cigarettes,” Andolina said.
However, Philip Morris has already paved an alternative path. “In ten years, globally, we have shifted around 40 percent of our revenue toward combustion-free solutions. In Europe, we’ve done even better, reaching 46 percent,” he said. The group’s future ambition is to continue down this path, aiming to raise the bar to as high as 80 percent.
In July, the European Commission proposed a revision of tobacco taxation. The aim is to raise excise duties to harmonize European tobacco taxation, a potentially dangerous change for the American company. Andolina, however, dwells on the positive aspect of the directive. “We are happy that the Commission recognizes that combustion-free cigarettes are different from traditional cigarettes and will therefore be taxed differently.”
The interests of so many people in the EU are at stake. Philip Morris is a giant of the EU economy, and this is evident from the numbers presented in the report. According to the report, signed by Ernst & Young and presented today, the company contributed around 289 billion to the EU economy between 2019 and 2023. Admittedly, the calculation is broad and takes into account direct impact, value added, and tax revenues, but it remains a very significant figure.
Some European economies are more affected by Philip Morris’ investments than others. One of these is Italy, which ranks among the group’s leading suppliers due to its extensive tobacco production. In the five years analyzed, purchases from Italian producers totaled approximately 377 million euros, generating exports of 1.8 billion euros. Moreover, over 2,700 people work for the American company in our country, out of a European total of 21,500.
In recent years, despite some anti-smoking campaigns, Philip Morris has presented consistently positive balance sheets. This, thanks to an intelligent transition to a “smoke-free era,” a gradual process that, according to Andolina, “generates real and positive change, driven by Europe.”
The interests of the tobacco industry, however, clashed with the demands of the institutions. In the proposal made by the Commission to the Council during the summer, the European body announced its willingness to increase excise duties, currently considered “outdated” and “ineffective.”
The Commission’s objective, presented in July, “is the fight against cancer, which envisages that less than 5 percent of the population will use tobacco by 2040. Smoking prevalence in the EU is currently still at 24 percent.” The intention is to target not only traditional cigarettes, but also new alternatives. The proposed approach is to create a generic category for all other nicotine-containing products, thereby updating the EU framework to reflect market developments and closing existing gaps. Updates are now expected from the Council.
English version by the Translation Service of Withub
