POINT BY POINT RESPONSES TO QUESTIONS PUT TO PHILIP MORRIS INTERNATIONAL BY THE CHANNEL 4 ‘DISPATCHES’ PROGRAMME
Channel 4 Dispatches: Attribution: Dr Moira Gilchrist BSc (Hons) Pharmacy, PhD Pharmaceutical Sciences, The Secrets of Big PMI’s Vice President. Strategic & Scientific Tobacco: Has Philip Communication: Morris International Really Given Up “Globally, Philip Morris International is In the UK, Philip Morris supports the committed to achieving what governments Government’s commitment to make England Smoking? and the public health community challenged smoke-free by 2030. To realise this ambition, us to do: develop a less harmful product. To millions of current smokers need to be The program looks at Philip this end, PMI has invested billions of dollars persuaded to quit altogether or switch to Morris International’s (PMI) in science and technology to achieve that less harmful alternatives. Critical to this will “Unsmoke” campaign and precise objective. If people who smoke are be putting in place a regulatory framework the principles that underlie it, denied accurate information—or worse yet, that ensures smokers have the facts about including the company’s stated are deceived--about less harmful alternatives, alternatives and that tobacco companies are aim to “replace cigarettes with the vast majority will simply continue to pushed to phase out cigarettes. And we have smoke-free products as soon and smoke cigarettes. We have faced a number of made this point time and time again to MPs, fast as possible.” It also looks at the similar, and seemingly coordinated, allegations civil servants, local councillors, journalists marketing of IQOS as a “reduced recently. To set the record straight we have and the broader public. What this story risk” alternative to smoking and addressed allegations made against us on really shows is that Philip Morris has been the plan to deliver “a smoke our website: PMI.com. We invite everyone to consistent in its efforts to make smoke-free free future.” The programme learn the facts, study our science and arrive at 2030 a reality.” also examines whether these their own conclusions. principles are reflected in PMI’s global marketing strategy. Within this, it looks at the continued focus of PMI on the sale and promotion of conventional cigarettes in Indonesia where PMI affiliate Sampoerna is a prominent brand. The programme also explores PMI and Sampoerna’s involvement in public health policy and regulation.
1 1. Public trust in PMI:
A R there have historically been We are not asking anyone to trust us. All • Nearly 10 million adults have completely issues of trust surrounding we ask is that people examine the scientific stopped smoking cigarettes and switched Big Tobacco companies. The evidence and judge us on our actions. to our electrically heated tobacco system, programme will explore such which is now available in 52 markets concerns around trust and PMI, The proof of our commitment to end the including its recent attempts to sale of cigarettes is in the numbers: • Whilst cessation is clearly the best “normalize” the brand and offer option, our market research across many alternatives to smoking. • Smoke-free products are now almost countries indicates that 80% of adults a fifth of our business—up from zero five who smoke want better alternatives years ago • In 2019, 71 percent of our commercial • Since 2008, we have invested $7.2 spend was dedicated to smoke-free billion to develop and scientifically products substantiate smoke-free alternatives These facts are the real story.
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The programme will refer to Referring to events that took place almost this framing clearly demonstrates bias the notorious public denials of 30 years ago to discredit our efforts and that you do not intend to deliver an Philip Morris executives – as today, is at best disingenuous and at worst objective, impartial assessment of the late as 1994 – in relation to risks perpetuating the outcome that no topic of the “safety of alternatives to the damaging and addictive one wants: a world with a billion smokers traditional smoking” properties of cigarettes despite in the decades to come. Your plan to use the overwhelming scientific evidence of which they were aware.
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It will also refer to the 2006 smoking causes disease, The U.S. federal legal case referenced was issued in a United States federal legal case suffering and death. Despite civil case brought by the U.S. government against the internal recognition of this fact, against a number of tobacco major U.S. cigarette manufacturers and their parent companies including Philip Morris Defendants have publicly denied, distorted and minimized the companies. Neither Philip Morris International Inc. USA (an Altria company) which (PMI) nor any PMI affiliate was a defendant in the concluded that those companies hazards of smoking for decades.” had repeatedly and knowingly lied Judge Kessler also referred to case. The case was based on a unique U.S. federal to the public about the dangers of “a massive 50 year scheme to statute and centered on allegations concerning the smoking: “Cigarette defraud the public” by those U.S. cigarette industry during the 1950s through the companies. 1990s. The 2006 trial court decision is contrary to the vast majority of decisions in tobacco litigation in the U.S. and around the world.
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The programme notes that Philip We note that you intend to allege that the anything else, Philip Morris International Morris International (PMI) was 2008 spin off in which Altria disposed of its Inc., our ultimate parent company, is spun off from Altria in 2008, and shares in PMI was to enable PMI to escape incorporated in Virginia, United States, is away from the jurisdiction of the the jurisdiction of the US Courts. This is a listed on the New York Stock Exchange US courts. false and extremely prejudicial allegation, and maintains its corporate headquarters suggesting that PMI had something to at 120 Park Avenue, New York. hide and/or fear from US justice. It is without any factual basis; quite apart from
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The programme will refer to The negative characterization of We are working every day to demonstrate an internal PMI corporate “normalize” misses the point that that we have science and technology that strategy document from 2014 hundreds of millions of adults who will is already proving indispensable in helping which described a policy of otherwise keep smoking should have adults who would otherwise continue to “normalization” to “establish PMI access to better alternatives. smoke switch away from cigarettes. as a trusted and indispensable partner.” PMI appears to have To move forward in the best interests For example, a recent study from the devised an ingenious corporate of public health and adult smokers, we American Cancer Society showed that in strategy designed to protect believe that tobacco policies should Japan the introduction of our electrically its profits in a world that’s increasingly hostile to tobacco. continue to focus on keeping people from heated tobacco system has caused starting to smoke and on helping people cigarette sales to decline five times faster quit. An essential third element is to than before its introduction, without ensure that adults who continue to smoke increasing overall tobacco use [PMI have access to, and information about, Sustainability Report 2018, p33]. This smoke-free products that are a much was accomplished without a major change better choice. in national tobacco control policy.
3 2. Concerns about PMI’s ‘Smoke free future’ and alternative products, including IQOS and “heat not burn”
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The programme will question We are transitioning our Company, We understand the scepticism the veracity and truthfulness our industry, and the world away from towards our industry and have become (particularly given big tobacco’s cigarettes. Our communications and accustomed to vocal mischaracterizations history of deceit and image regulatory engagement strategy is of how we make our views known. management) of PMI’s mission completely and transparently aligned with to deliver a “smoke free future” this aim. We are working to provide better and its so-called reduced risk alternatives to smoking, which is a well- alternatives as part of its apparent recognized element of tobacco control. goal to normalize and detoxify the brand.
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PMI has created its own smoking We have transparently made our science Administration (FDA) , who looked at the replacement – IQOS – which has on IQOS publicly available and have totality of the available science—including been the subject of considerable submitted it to government agencies that of PMI and “critics” of the products— scrutiny and scientific criticism. around the world. authorized the product for sale in the United States after finding it to be We proactively sought scrutiny. “appropriate for the protection of public health” following a thorough and almost In 2019, the U.S. Food and Drug two-year long scientific review.
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We have interviewed an The premise of this allegation is wrong. PMI’s ‘Good Conversion Practices’ executive at Action on Smoking Smoking rates are declining worldwide, policy serve as the company’s bedrock and Health (ASH), a public health but there are still more than a billion for encouraging adult smokers to switch charity, who says of PMI: “Philip people on the planet who smoke today. while working to prevent unintended use Morris says it wants to end The World Health Organization predicts in the countries where we sell smoke- smoking but it only wants to do that there will still be the same number free products that do not burn tobacco. it by establishing a replacement in 5 years’ time. These people deserve In our IQOS stores, we refuse to offer market because otherwise access to the better alternatives that exist these products to people who have never basically its business comes to an right now. smoked or those who have quit smoking. end. They say they only want to sell these replacements products We are also clear that these products to smokers … but if we genuinely PMI’s message—which is a reflection of are not risk-free or a safe alternative end smoking then they’re going its key corporate positions—is clear and to cigarettes. Similarly, our marketing to have to start selling these simple: standards are rooted in the principle that replacement products to non- • If you don’t smoke, don’t start. we market and sell our products to adult smokers, because otherwise • If you smoke, quit. smokers. they’ll go bust”. • If you don’t quit, change. When reviewing the available data, the For PMI, the long-term business FDA, as part of its scientific review process opportunity is to convert adult smokers to grant Premarket Tobacco Product who would otherwise continue to smoke Application authorization (PMTA) of cigarettes to better alternatives. IQOS for commercialization in the US, As of December 2019, we estimate IQOS noted: “available data, while limited, also is being used by close to 14 million legal- indicate that few non-tobacco users age smokers, with close to 10 million would be likely to choose to start using of these fully converted and another 4 IQOS, including youth.” million in various stages of conversion.
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PMI say that in conventional The burning of tobacco produces the vast burning tobacco, what IQOS emits is cigarettes it is the burning of majority of harmful chemicals in cigarette not smoke but an aerosol Additionally, tobacco which releases harmful smoke, and by eliminating the burning compared to cigarettes smoke, the levels chemicals. PMI claim that by process—as is the case with smoke- of harmful chemicals in the IQOS aerosol heating rather than igniting free products—the levels of harmful are significantly lower. tobacco, IQOS releases not chemicals generated can be significantly smoke, but what they call aerosol. reduced compared with cigarette smoke. Please verify these facts, at In relation to the ‘heat not burn’ It is accurate that by heating rather than pmiscience.com product IQOS, PMI claim: “the levels of harmful chemicals are significantly reduced.”
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The programme questions this It is misleading to highlight this study products and [conventional cigarettes] claim and features comment without placing equal prominence on the due to analytical issues – specifically lack from Dr Reto Auer, primary care U.S. FDA’s conclusions about this study. of testing reference samples, low number physician and clinical researcher of replicates, and a lack of sensitivity on at the University of Bern. He is The FDA’s review of the Research Letter some analytical methods. the lead author of a study of IQOS from Auer and his colleagues and also in 2017. His team felt the smell of personal communications with the https://www.fda.gov/media/124247/ the product was similar to burnt authors, concluded that: download (see page 21). tobacco and they conducted comparative tests. He told us: “We compared what comes out “Auer et al conducted the analysis over Regarding claims about Carbon of the IQOS and of a conventional two consecutive days and some of Monoxide, the FDA also concluded: cigarette. There were the same the data included too few replicates. “Removal of the warning: “SURGEON toxic compounds, in less quantity Data published in the article lack the GENERAL’S WARNING: Cigarette in the IQOS. However it was the appropriate number of replicates, and do Smoke Contains Carbon Monoxide.” from same toxic compounds … So we’re not include testing of some compounds the required warnings to be displayed looking at carbon monoxide. … in cigarettes, such as acenaphthene. In on the product package labels and We’re looking at tar … This is the addition, the identity of some of the advertisements under FCLAA. Based main component that produces compounds, such as acenaphthene, on a fair evaluation of all material facts, cancer.” cannot be confirmed since the method the warning is misleading with respect used is not selective. The data published to these products which, although is not considered adequate for comparing categorized as cigarettes, do not produce the levels of HPHCs between the IQOS carbon monoxide above environmental products and combusted cigarettes. levels and do not increase CO-related There are significant analytical issues in health risks.” the Auer study, such as lack of testing https://www.fda.gov/media/124247/ reference samples, low number of download (see page 98) replicates, lack of selectivity on some analytical methods. In comparison, we They also noted this in their press release: have not identified specific issues with the https://www.fda.gov/news-events/ applicant’s [PMI’s] methods.” press-announcements/fda-permits- sale-iqos-tobacco-heating-system- https://www.fda.gov/media/110387/ through-premarket-tobacco-product- download (see page 13). application-pathway
And: “…the [FDA] chemists concluded We are clear in our communications that the data published by Auer et al. are not IQOS is addictive and is not risk-free. considered adequate for comparing Using “Tar” as a measure of harmfulness the levels of [harmful and potentially of a product has no scientific ground and is harmful constituents] between the IQOS deceptive. “Tar” is simply the total weight
5 of solid and liquid residue in cigarette instance, the World Health Organization smoke after the weight of nicotine and (WHO), in a report (https://www.who.int/ water has been subtracted and fails to tobacco/publications/prod_regulation/ give any indication about the composition trs989/en/) on the scientific basis for of the material, in particular the amount tobacco product regulation, rejected the of harmful and potentially harmful usefulness of including tar indications for chemicals. This is why many governments consumers: “Tar need not be measured, as and public health organizations have it is not a sound basis for regulation, and supported removing “Tar” measurements the levels can be misleading”. as being misleading to consumers. For
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We will make clear that Auer We do not claim that IQOS is risk-free or Compared to the smoke of a reference believes there are no safe safe. cigarette, IQOS emits on average 95% minimum limits for some of these lower levels of harmful chemicals. type of chemicals and that more It is a better alternative for adults who independent research needs would otherwise continue to smoke. It is We welcome further independent peer- to be done about the health not an alternative to quitting altogether. reviewed studies on IQOS. consequences of IQOS. The best choice any smoker can make is to quit tobacco and nicotine altogether.
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We will inform our viewers that includes the following passage: The reliability of Dr Auer’s research letter has PMI disagree with Dr Auer’s study “‘We respectfully request that been questioned by highly respected institutions, you instruct the authors to and its outcome and took the including the FDA. unusual step of writing a letter in urgently retract the inaccurate and damaging Research Letter this regard dated 6th June 2017 Dr. Gilchrist wrote to Dr. Auer’s supervisors and and signed by Moira Gilchrist, to and re-conduct the study at Dr Auer’s supervisors. The letter an accredited laboratory using Dr. Auer himself. PMI’s Chief Scientific Officer, validated methods.’” Prof. Manuel Peitsch also wrote to the journal’s editor [link] to express our concerns about the study methodology and conclusions. Additionally, independent experts also expressed concerns about the research letter [link]
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He makes clear that PMI invited We invited Dr. Auer to choose a suitably accredited laboratory using validated them and that they would take qualified laboratory to re-conduct his methods that are appropriate to quantify care of the cost of it. Auer says: study. We would have had no role in his the constituents under investigation. “So what they recommend is research save for offering to reimburse PMI would be happy to reimburse the basically that we work with them, the cost, should he so wish. Our letter costs of this new study, either directly or right? So you can, you can do said: by facilitating the collection of donations independent research as long as from IQOS consumers, who would you use our method and you sure “We respectfully request that you instruct doubtless be interested in receiving you interpret it our way.” the authors to urgently retract the flawed, validated results from an independent inaccurate and damaging Research and credible institution.” Letter and re-conduct the study by an
6 It is unfortunate that he did not take up a physician and medical journalist who our offer. runs the website Retraction Watch, spoke out about the quality of some Despite the serious concerns raised by academic science. In relation to a recently PMI, other independent experts and the retracted paper on e-cigarettes, he said U.S. FDA, the authors (Auer) has neither “Glantz’s study shows the positions and reproduced the study using appropriate funding sources of authors don’t assure methods, nor have they retracted the accuracy. There are far more retractions study. from academic laboratories without pharmaceutical industry funding than Non-industry funded studies on from the industry-backed ones.” He added e-cigarettes and other harm reduction that “industry researchers know they are products are not without controversy. In under scrutiny, while advocates seldom a recent USA Today article, Ivan Oransky, evoke the same skepticism.”
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There are concerns regarding PMI recognizes that combustion and the In keeping with this portfolio approach, the apparent decision of PMI to production of smoke is the primary cause we have commercialized e-cigarettes focus resources on IQOS more of smoking related disease, therefore is in parallel with IQOS for several years. than e-cigarettes. Dr. Reto Auer developing a portfolio of products that We have recently announced that later says, for example: “You ought to deliver nicotine without burning tobacco. this year we plan to launch the latest ask Philip Morris why they’re not Some of these products use heated generation of e-cigarette products, IQOS investing more in e-cigarettes … tobacco and others do not and are more Veev at scale in Europe. because it looks like e-cigarettes similar to e-cigarettes. are safer than the IQOS… You Many adult smokers have switched to don’t make much money with the e-cigarette. With these IQOS The idea is to maximize the number of e-cigarettes and abandoned cigarette in Switzerland its taxed way less current adult smokers who switch to smoking, but many have not. The best than a conventional cigarette, smoke-free products completely, and option is to quit, but for those smokers but it’s sold the same price… so I therefore need products that are less who don’t, a product that more closely don’t need a PhD in Economics to harmful and satisfy adult smokers enough mimics the smoking experience (sensory, understand that this is interesting so that they abandon cigarettes. taste, ritual, etc.), may be an alternative for the tobacco industry to invest they would switch to. What is most in the IQOS instead than in The two principal categories of smoke important is that adult smokers have e-cigarettes.» free alternatives are heated tobacco, access to a range of products that they are which makes up around 70% of the total able to switch completely and abandon international retail value of $23 billion, cigarettes. and e-vapor at 30%, all based on our latest estimates. We also note that heated 71% adults who use IQOS have switched tobacco is growing faster than e-vapor, to our electrically heated tobacco helped by the quality of consumer system completely and stopped smoking experience and consequent better rates cigarettes. of conversion away from cigarettes.
7 A R said: “Profitability. IQOS will [ADDITIONAL QUESTION be much more profitable. Its (a) We have provided a comprehensive response put billions into development RECEIVED 20/02/2020] regarding the veracity of Dr Auer’s claims and the of IQOS to make sure that it the programme will question the can’t be easily counterfeited and U.S. FDA’s conclusions about this study. To ensure safety of alternatives to traditional that it replicates the smoking fair and impartial journalism, it is only reasonable smoking. For example, we experience and that it can be sold that Dispatches places equal or greater prominence understand that e-cigarettes can at a level that means that they on the scrutiny that his study. addict their users to nicotine, but can make the same excessive vaping is generally recognised to profits then make on cigarettes (b) This is factually incorrect. be far less harmful than smoking in the longer term. That’s why PMI has commercialized e-cigarettes in parallel cigarettes. (a) As you know, we they’re not interested in vaping, have interviewed Mr Auer about with IQOS for several years. We have recently because vaping is a much more announced that later this year we plan to launch his research. (b) We have also competitive market – you can interviewed an executive at ASH buy cheap products that are easy the latest generation of e-cigarette products, IQOS who, asked why Philip Morris is to use and effective that really Veev at scale in Europe. focussing on IQOS if the health undercut the ability of companies case for IQOS is less clear cut like Philip Morris to make the big Many adult smokers have switched to e-cigarettes than it is for e-cigarettes, profits they want to make”. and abandoned cigarette smoking, but many have not. For these smokers a product that more closely mimics the smoking experience (sensory, taste, ritual, etc.), may be an alternative they would switch to. What is most important is that adult smokers have access to a range of products that they are able to switch completely and abandon cigarettes.
71% adults who use IQOS have switched to our electrically heated tobacco system completely and stopped smoking cigarettes.
Further, ensuring that IQOS and its components cannot be easily counterfeited protects the population from using it with products that have may have been produced by unscrupulous producers or illicitly traded.
8 3. Concerns regarding Juul and PMI’s marketing strategy regarding IQOS
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We do not own Juul, we have no It is highly misleading to suggest that investment in Juul and are a completely PMI endorses or has a similar marketing separate company from Altria. A simple strategy to Juul. web search would have confirmed this.
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To contextualize this matter, we This attempt to “contextualize” is commercial interest whatsoever with explain that PMI’s former parent highly misleading and false there is no their investment in Juul or with Juul itself. company, Altria, with which it relationship between PMI and JUUL. For questions regarding Juul, please retains corporate links, owns 35% PMI is a wholly separate company from contact Juul. of one of the most popular brands Altria and we have no relationship or – JUUL, which, in its early days was blatantly marketed at young people. These ads stopped after Altria bought its share but JUUL retains a mass youth market.
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It is noted that PMI say IQOS You have not provided the footage on our marketing standards are rooted in is marketed exclusively at adult which you seek our comment. the principle that we market and sell our smokers. The programme products to adult smokers. includes footage of an IQOS We market and sell IQOS to adults who launch event available online would otherwise continue smoking. It In Japan, the largest IQOS commercial which feature attractive young is possible for legal aged smokers to be market and the first country where the people. attractive. Just because some appear to product was commercialized, we are be young adults does not mean that they encouraged by the results of a recent are children or that we market to youth. study conducted under a Japanese PMI’s ‘Good Conversion Practices’ Ministry of Health research grant, which policy serve as the company’s bedrock showed that 0.1% of high-school students for encouraging adult smokers to switch were daily users of heated tobacco while working to prevent unintended use products. in the countries where we sell smoke- free products. In our IQOS stores, we We have not been presented with any refuse to offer these products to people evidence to show that there is any issue who have never smoked or those who with unintended use among youth in have quit smoking. We are also clear any of the 52 markets where IQOS is that these products are not risk-free or currently available. a safe alternative to cigarettes. Similarly,
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In a recent Stanford University was splashing advertisements We have not seen this study since you have not study, the authors considered and press announcements … that provided it to us nor has it been published as far as they were giving up cigarettes … IQOS and the Unsmoke we are aware, and therefore cannot comment. campaign as linked. The However, when you look at this … it really is a means of promoting programme features comment Our vision is that one day smoke-free products will from Professor Robert Jackler IQOS. It is an advertising from Stanford Research Into The campaign for IQOS. If they really replace cigarettes. The sooner the world transitions Impact of Tobacco Advertising. meant what they said … why does away from cigarettes, the sooner we can stop making He says: “Early in 2019 Philip it continue to push Marlboro them. Morris International throughout the world?”. However, we doubt that there is anything PMI could say or do that Dr. Jackler, and others who criticize our scientific commitment and smoke-free vision, would ever find satisfactory
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Professor Robert Jackler says of We are very concerned by the apparent Jackler says. As to this, we note (a) that a Altria and PMI: “What I perceive recognition in your letter (first paragraph ‘corporate link’ is not the same thing at is that is a joining of the 3 major of section (c)) that the contribution of all as a joined up international strategy tobacco brands and companies, Professor Jackler (the apparent source operated by Altria, PMI and Juul (“They Altria, PMI and JUUL … They have of the allegations of an international have iQOS…they have Juul..”) and (b) you Marlboro, the leading regular conspiracy between PMI, Altria and Juul) do not substantiate at all what these links cigarette. They have IQOS the is inaccurate. It appears that, in order to are said to be1. Rather, this appears to leading heat not burn and they provide his allegations with some ‘cover’, be an attempt to use Professor Jackler’s have Juul, the leading vapour you intend to allege continued ‘corporate inflammatory contributions at any cost, product – at least in the United States … I can easily foresee, Philip links’ between us and Altria/Juul, as if this regardless of their accuracy. Morris International, Altria and in some way substantiates what Professor Juul seeking global dominance 1 In the interests of transparency, we note that Altria is the distributor of IQOS product in the USA, under a commercial license and across traditional tobacco distribution agreement. That is an arms’ length relationship with a third party, and not a ‘corporate link’ of the kind which would justify and emerging …categories of Professor Jackler’s baseless allegations. products.”
10 4. Concerns regarding PMI’s involvement in UK public health policy and regulation.
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The programme looks at concerns PMI supports the Government’s framework that ensures adult smokers that PMI may be attempting commitment to make England smoke- have the facts about alternatives and that to influence the UK’s product free by 2030. To realise this ambition, tobacco companies are pushed to phase regulations and health policy, millions of current adult smokers need to out cigarettes. We have made this point including by use of its ‘reduced be persuaded to quit altogether or switch time and time again to MPs, civil servants, risk’ products. to less harmful alternatives. Critical to local councillors, journalists and the this will be putting in place a regulatory broader public.
A R b) The programme will include Dispatches has not revealed who this This scale of investment over a long comments from an industry “industry watchdog is”. However, we timescale demonstrates clearly that this is watchdog’s forthcoming report: believe that the “watchdog” you refer far from a “PR exercise”. “PMI’s claims are a massive PR to is ‘Expose Tobacco’. This is not an exercise intended to enable it independent watchdog, rather part of There is growing recognition among to access the policy circles from a campaign coordinated by American governments, scientists, and public health which it had been excluded, and special interest groups, all of whom are experts that scientifically substantiated to design future policies in its own seemingly funded by the same source— smoke-free alternatives—in combination interests.» Bloomberg Philanthropies—dedicated with existing measures to prevent to just one mission. Under the guise of initiation and encourage cessation—can promoting public health, they are working play an important role in addressing the to rob adults who smoke of their right to global public health issue of smoking. PMI choose scientifically substantiated better believes that there needs to be an open, alternatives to continued smoking. informed debate with all sides involved. Decisions on the future of public health Since 2008 PMI has invested $7.2 billion are often made behind closed doors to develop and scientifically substantiate without any public accountability or smoke-free alternatives. As of December scrutiny. 2019 To move forward in the best interests • Nearly 10 million adults have completely of public health and adult smokers, we stopped smoking cigarettes and switched believe that tobacco policies should to our electrically heated tobacco system, continue to focus on keeping people from which is now available in 52 markets starting to smoke and on helping people quit. An essential element is to ensure that • Whilst cessation is clearly the best adults who continue to smoke have access option, our market research across many to, and information about, smoke-free countries indicates that 80% of adults products that are a much better choice. who smoke want better alternatives
• In 2019, 71 percent of our commercial spend was dedicated to smoke-free products
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The programme will refer to an We proposed a comprehensive approach advertising regulations, we believe they internal PMI document from which would put in place a regulatory should enable adult smokers to receive 2018. This outlines what seems framework with the objective of enabling accurate information about smoke- to be PMI’s proposed regulatory adult smokers to have access to and free products. We market our products framework for the UK after accurate information about smoke-free responsibly and wholeheartedly support exiting the EU, including the alternatives, while pushing tobacco efforts to prevent access to these (and repeal of parts of the tobacco companies to phase out cigarettes any) tobacco or nicotine containing products directive, the removal through a tobacco transition fund paid products by minors. of the cap on nicotine strengths for by the industry. With respect to in e-liquids, and the loosening of advertising restrictions around e-cigarettes and heated tobacco products.
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In reference to the same The UK Government has endorsed outdated and inconsistent. We support document, the programme the principle of harm reduction and the creation of a new product category mentions the aim of creating has encouraged smokers to switch to that is future-proofed and for which any a new product category called less harmful alternatives, if they don’t communication of the products would be “Considerably Less harmful Novel quit tobacco and nicotine altogether. restricted to specifically targeting adult Smokeless Tobacco Products” Unfortunately the regulations governing smokers. which would seemingly be subject tobacco and nicotine products are to less stringent advertising regulations. It is noted that this is likely intended to cover PMI’s IQOS products.
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The programme also features years. The document suggests If the Government were to establish a tobacco an additional internal document the fund would be overseen by transition fund, based on contributions based on the Tobacco Harm Reduction from 2018. This outlines a the tobacco companies’ market share, it would only proposal for a £1 billion “tobacco Commission which would “hold regular meetings bringing be natural that companies meet with regulators to transition fund” to “support a share data and demonstrate progress in relation to smoke free UK”. This would be together all stakeholders” raised through a levy on tobacco including the Department the fund’s objective for the industry to phase out companies according to their of Health, HMRC, tobacco cigarettes. This would ensure accountability and market share over a period of ten manufacturers, civil society and transparency. expert witnesses.
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In reference to the documents, what they want out of it, which Really…? It doesn’t matter who came up with the an executive at Action on is relaxation of the advertising idea as long as it helps the 7.2 million smokers in the rules …Its a trade-off and they Smoking and Health (ASH), says: UK to abandon cigarettes for good. “Well I mean they’re absolutely want to have a seat at the table extraordinary because basically in developing the policy and what they’ve done is stolen our oversight of the spend and that’s idea …. of a polluter pays levy on completely unacceptable. … It’s tobacco manufacturers to fund all about switching smokers to the end of smoking, …but buried alternative products… so it feeds within this proposal is a sort of their market ambitions and not poisoned pill where they get ours, which is to end smoking properly.”
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The programme also notes that Kevin Barron unsuccessfully None of these ideas are new. What this shows is that in an email accompanying the put forward a bill containing we are putting our words into actions with practical documents, reference is made to many of the same proposals, and encouraging the government to solutions that will help the Government achieve its discussions with an unnamed MP. commitment to make England smoke-free by 2030. In October, 2018, some months partner with the tobacco industry. after the documents appear to The executive from ASH says, “I have been drafted, Labour MP think there are questions to be asked about how it’s so similar, how that came to be.”
13 5. Concerns regarding the promotion of conventional cigarettes in Indonesia, its appeal to a younger market
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The programme will raise the As PMI—and the world—transitions away cigarettes, the sooner we can stop making apparent contradiction in PMI’s from cigarettes towards smoke-free them. mission to deliver a “smoke products, PMI intends to maintain its free future” and promotion of market position. Our leadership position in the cigarette ‘less harmful’ alternatives in the market gives us greater ability to convert developed world, compared to its Our vision is that one day smoke-free adult smokers to smoke-free products activities internationally, where products will replace cigarettes. The and generates the revenues to fund our there appears to be no intention sooner the world transitions away from rapid transformation. to stop or end smoking. We query whether if PMI really wanted to save lives, the best way to stop people smoking would be to stop selling and advertising cigarettes. Indonesia is a particularly lucrative market for PMI and other big tobacco companies, where around 60% of men and 20% of all 13-15 year olds smoke.
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We note that public health National Governments hold the advertising. Some do not. PMI complies policy regulation and promotion responsibility to develop and implement with these regulations. of cigarettes is more relaxed their own regulation. Some allow in Indonesia than the UK and that cigarette adverts are still permitted on television, with some restrictions.
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A commercial for A Mild is PMI only markets cigarettes to legal-aged - PMI does not place advertising on referenced which appears to smokers. the front or back cover of a printed appeal to a younger market2. publication for general circulation or Sampoerna is an affiliate of PMI - PMI does not use images that have general circulation to the trade. and subsidiary of PT Philip Morris particular appeal to minors, including Not a single cigarette appears in the Indonesia. youth-oriented celebrities or cartoons. advert.
2 https://www.youtube.com/watch?v=CU- uMbk4p1jQ&list=PLVVf9sPklL6koI7CMJg- - PMI does not use models who are or “Go ahead people” and “tapi gue jadi” fLO80cowKh_RuG&index=7 who appear to be under the age of 25. are both campaign executions for our brand AMild. The advertising is aimed at - PMI only places advertising in media legal-aged smokers and placement of our channels, venues or events that are not adverts across different channels follow directed to minors and whose audience is local regulation and PMI’s marketing reasonably estimated to be at least 75% code. adults. In addition, when it comes to in-store - Advertising on television, in radio point-of-sale materials placement, broadcasts, or in cinemas only appears in Sampoerna includes the youth access the later evening hours. prevention program campaign materials.
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The film features an interview It is hard to comment on a matter that we These are constructed as access- with one local anti-tobacco have not seen. If you will provide us with controlled sites that are accessible only to campaigner who shows more information, we will follow up and residents of a particular country. the reporter a Sampoerna- respond accordingly. We do not use social media for advertising, owned website, www.amild. direct communications or unbranded id, which promotes the A Mild Our websites for adult smokers cannot be communications related to combustible (Sampoerna) brand. The website accessed without prior age verification. tobacco products. features a video of what appears to be a social media influencer in Indonesia. The campaigner says: “These young people actually they become the ambassadors of … A Mild…. They go inside of our lifestyle, everything that we love, everything that we do and then at the end some of us young people think we cannot live without them”.
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The campaigner also shows It is hard to comment on a matter that we We do not use social media for advertising, Instagram pages carrying the have not seen. If you will provide us with direct communications or unbranded hashtag #GueDecide. Social more information, we will follow up and communications related to combustible media like Instagram is known to respond accordingly. tobacco products. attract young people. Referring to the hashtag, he says: “This is actually based on the international campaign for Marlboro…As you can see people are posting their posts you know with this ‘I decide’ hash tags. Some of them are in a club… having so much fun”.
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The campaigner also raises It is hard to comment on a matter that we PMI neither owns nor has any means of concerns about Sampoerna’s have not seen. control over the vast majority of the retail advertising banners close to points of sale around the world where schools. We visited Bogor City We have not been provided with details people buy our products. and noted that a shop in the street so we have not been able to look into any of Karedenan, Cibinong displayed details that are being alleged regarding However, we recognize that when we a banner advertising A Mild, close any possible contractual relationships. If have the opportunity—for instance with to the SMK N 1 Cibinong school, you will provide that information, we will our direct trade partners—we have a the National Senior High School follow up and respond accordingly. responsibility to set robust standards 2 Cibinong and the SMK BINA TEKNOLOGI Cibinong. The As a matter of policy, we do not place and to work with them to guard against slogan said “The others are like outdoor advertising where the advertising sales to underage purchasers. We have this and I’m like this” which the is readable from facilities attended or developed a set of tools for our affiliates campaigner commented was “a frequented primarily by minors. to use to work more closely with their subtle message that when you trade partners to guard against sales smoke you’re different from the We are committed to doing our part to to underage purchasers, such as model others, you’re cooler”. He went prevent underage use of nicotine and clauses for contracts with trade partners, on: “If Philip Morris is really tobacco products. written communication to retailers aiming for a smoke free world reinforcing PMI’s commitment to not and trying to stop people from you know smoking cigarettes... then do not advertise you know
15 in front of schools like that”. We understand that the shopkeeper sell its products to minors and PMI’s products will comply. received payment directly from Sampoerna which is part of Philip expectation that all retailers who sell PMI Morris International - for this advertising.
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Reflecting on Sampoerna’s ‘You should develop a safer product.’ For We understand the scepticism advertising activities, the decades, that is what governments and towards our industry and have become campaigner says: “This is not a the public health community have told the accustomed to vocal mischaracterizations brand who’s trying to make a tobacco industry. PMI has invested billions of how we make our views known. smoke free world. This is a brand of dollars in science and technology to Our vision is that one day smoke-free who is trying to attract more achieve that precise objective. products will replace cigarettes. The young people …to be smokers …. sooner the world transitions away from We cannot trust them.” cigarettes, the sooner we can stop making them.
16 6. Concerns regarding lobbying in Indonesia
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Indonesia has not signed up to We assume here that you are talking The Treaty actually says: international conventions that about the Framework Convention on forbid tobacco companies from Tobacco Control, in which case it is “In setting and implementing their public involvement in public health absolutely incorrect to suggest that it health policies with respect to tobacco policy. prohibits tobacco company involvement control, Parties shall act to protect these in public health policy. This is a frequent policies from commercial and vested mischaracterization. Such a prohibition is interests of the tobacco industry in not supported by the letter, nor the spirit, accordance with national law.” [FCTC of the Treaty. article 5.3]
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The programme notes that the Although the announcement of the ability for small cigarette manufacturers Indonesian government recently increase in cigarette excise tax made on to be able to compete in the market. introduced a 23% rise in excise 13 September 2019 was very surprising, This policy gap provides space for large tax on tobacco products, a rise Sampoerna respected the President’s companies to sell international-brand which Sampoerna appear to decision. At present, we are working to white cigarette made by machines paying have opposed. A statement determine how to manage the impact of excise rates equivalent to the excise tariffs from Sampoerna directors was the increase. While we are waiting for for the hand-made clove cigarette (SKT) reported at the time to have said the details of the excise tax policy to be brand. This competition creates pressure that: «It will definitely disrupt the officially released, we intend to submit two on the labor-intensive SKT segment and tobacco ecosystem.”3 recommendations to the Government to causes the government to lose state 3 https://uk.reuters.com/article/indo- support the continuity of employment. revenue from excise duty. nesia-tobacco/indonesia-finance-minis- ter-defends-plan-to-raise-cigarette-pric- es-idUKL3N2672NC First, the government has consistently In Sampoerna’s view, a better policy would shown its support for Small and Medium be to set the excise group of companies Enterprises (SMEs) through various based on the total volume of machine- programs including tax facilities. Criteria made cigarettes produced. This will make for SMEs are outlined in the SME Bill No. large companies pay the proper cigarette 20/2008 which stipulates that the Small excise tax, namely at high excise rates for Business has an annual sales revenue of machine-made cigarettes. For example, at most Rp 2.5 billion, while the Medium if a company produces more than three Enterprises Rp 2.5 billion to a maximum of billion machine-made cigarettes per year, Rp 50 billion. Both of these criteria are the regardless of the type of cigarettes, this threshold provisions of a company to get company must pay the highest excise tax ease in terms of regulation and taxation to on machine cigarettes. develop their SMEs. This policy was already planned by However, this does not apply to tobacco the government and included in the manufacturers as there are large Minister of Finance Regulation in 2017, companies that earn more than Rp. 10 but it is unfortunate that it was never trillion and produce billions of cigarettes implemented. Sampoerna believes that per year, but pay low cigarette excise tax now is the time for the Government rates. The low cigarette excise tax rates to close the policy gap, optimize state were originally designed to provide the revenue, provide protection for SKT
17 workers, and ensure fair competition in SKT segment has been under pressure the national tobacco products industry. for years and is in fragile condition. Any changes to the excise tax system and Second, around 80% of Sampoerna’s SKT structure will exacerbate an already 65,000 direct and indirect workforce difficult situation. are SKT employees. Of the total SKT workforce, 75% of the total SKT workers By implementing the two work in companies that pay the highest recommendations above, the excise tax. Given that SKT products Government can help the industry to require twice as much tobacco and clove mitigate the impact of the 2020 excise tax as SKM, the Government can support the increase, especially the SKT segment, and SKT community, including farmers and support the livelihoods of those involved workers, by minimizing the increase in in the tobacco industry, including tobacco SKT excise tax and maintaining the current and clove farmers, workers and retailers. tax structure of the SKT segment. The
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We spoke to a Jakarta-based Our ambition is to transition smokers otherwise continue to smoke to smoke- academic who has studied out of cigarettes and into better tobacco free alternatives. lobbying by Sampoerna and products. However, we are just at the other tobacco firms, who says: beginning of this journey in Indonesia. We’re also starting to see more interest “They are the enemy in the battle The company is committed to raising and support for better alternatives to of the smoking…We have the awareness and educating Indonesian continued smoking being shown by highest rates of smokers among stakeholders – the government, scientific officials and stakeholders. Government males in the world. And the very and public health community, industry ministers, provincial governors, religious fundamental thing is we do not participants, and most importantly, legal groups, public health experts and have any regulations to protect our tobacco control regulations age smokers (LAS) – about smoke-free academic researchers have all begun to from the interference of the products. We know this process will voice support for these alternatives. industry… They’re pushing the take time and its success will depend on retailers to sell their brand more numerous variables, such as consumer While the smoke-free journey will and more and more. When they preferences, the right products, progress, we will also continue work to sell more …. they can produce government support and regulations. address youth smoking. Since 2013, we more so you can see that there is have partnered with the retail community no intention for them to stop or IQOS is now present in Indonesia, albeit on an initiative called the Retail Access to end smoking Indonesia… It’s at small scale. We have begun introducing Prevention Program (RAPP) - a youth- business as usual.” IQOS to communities of Indonesian adult smoking prevention program that now smokers as part of our commitment over involves 120,000 retailers across the time to bring smoke-free products every country. The program works to raise where adults are smoking cigarettes. awareness with business partners, Approximately 95 percent of adult retailers and the general public about smokers in the country primarily smoke the need to prevent youth access to clove cigarettes. This dynamic is unique to cigarettes. The RAPP is implemented Indonesia. Heated tobacco products like through educational activities with our IQOS are different than cigarettes and business partners, including placing youth as we do not have a clove product in our smoking prevention materials in the retail portfolio, understanding how Indonesian environment. We’re committed to this smokers will use and react to IQOS will program with an objective to expand this be critical in our efforts to successfully to 300,000 retailers in the next three convert adult smokers who would years.
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The programme reports that in this some anti-tobacco activists This has been answered in the responses to 6 (b) & a country where many farmers in Indonesia feel strongly that 6 (c) and retailers depend on tobacco, Sampoerna uses that influence Sampoerna wields enormous not to combat smoking, but to influence. In light of actively encourage it and protect its profits.
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