POINT-BY-POINT RESPONSE TO QUESTIONS PUT TO PHILIP MORRIS INTERNATIONAL BY THE BUREAU OF INVESTIGATIVE JOURNALISM ALLEGATION: PMI RESPONSE: The key allegation is that Response from Dr. Moira Gilchrist BSc (Hons) ignoring the rights of hundreds of millions of Philip Morris International’s Pharmacy, PhD Pharmaceutical Sciences, adults who smoke; STOP ignoring science and “transformation” and “smoke- PMI’s Vice President. Strategic & Scientific evidence that doesn’t fit with their dogma; and free” campaign is disingenuous Communication: START having a real conversation. as the majority of its profits still This dangerous and misguided campaign come from cigarettes and it is “You should develop a safer product”. For has provided grants to media for journalism aggressively marketing cigarettes decades, that is what governments and that many people believe is independent. in countries with lax regulations. the public health community have told the Ultimately, this undermines the goal of harm The campaign is simply a business tobacco industry. PMI has invested billions of reduction and confuses adults who smoke strategy designed to market dollars in science and technology to achieve about better choices. And ironically, the IQOS, increase the company’s that precise objective. campaign attacks the only company that has profits and rehabilitate its image publicly committed to eliminate cigarettes. so that it can regain a seat at the A campaign coordinated by American special policy table, influence regulations interest groups, all of whom are seemingly If people who smoke are denied accurate and ensure the sustainability of its funded by the same source—Bloomberg information—or worse yet, are deceived- business. Philanthropies—are dedicated to just one -about less harmful alternatives, the vast mission. Under the guise of promoting public majority will simply continue to smoke health, they are working to rob adults who cigarettes. smoke of their right to choose scientifically substantiated better alternatives to To set the record straight we have addressed continued smoking. We have a question all of the allegations made against us by this for them: Why are they using an elaborate global campaign on our website: PMI.com. We network of organizations to deceive adults invite everyone to learn the facts, study our who smoke, elected officials, and the public science and arrive at their own conclusions. health community? We can only conclude that We have nothing to hide.” they are pursuing a disastrous prohibition- only crusade. We urge these groups to: STOP 1 1) PHILIP MORRIS INTERNATIONAL’S CONTINUED SALES OF CIGARETTES AND CONTINUED LEGAL ACTION AGAINST TOBACCO CONTROL POLICIES: A R PMI claims it wants to phase out This information is out of date. Our source: https://philipmorrisinternational. cigarettes but it sold more than publicly available 2019 fourth-quarter gcs-web.com/static-files/a8eed5ab-aac5- 740m cigarettes in 2018 and is report shows that cigarette shipment 410b-94ea-fa98bf659b0d only reducing its production by volumes decreased by 33,606 million 1% a year worldwide. units in 2019, indicating a 4.5% decline (including the effect of deconsolidating RBH) A R Its revenues from alternative This is out of date. In 2019, Reduced-Risk who would otherwise continue to smoke 2 products shot up from 0.2% in Products accounted for almost one fifth away from cigarettes have increased from 2015 to 14% in 2018, but the of total PMI Net Revenues. practically zero to almost one fifth of our majority (86%) still came from total Net Revenues. cigarettes. This growth demonstrates the strength of our commitment to a smoke-free Surely, this should be regarded as future. In just a few short years since we concrete evidence of our sincerity rather announced our commitment to a smoke than cause for cynicism from the unnamed free future, revenues from products that critics you cite? are key to transitioning adult smokers 2 “Reduced-risk products,” or “RRPs,” is the term PMI uses to refer to products that present, are likely to present, or have the potential to present less risk of harm to smokers who switch to these products versus continuing smoking. PMI has a range of RRPs in various stages of development, scientific assessment and commercialization. PMI RRPs are smoke-free products that produce an aerosol that contains far lower quantities of harmful and potentially harmful constituents than found in cigarette smoke. A R Its 2019 investor presentation As PMI—and the world—transitions away cigarettes, the sooner we can stop making state it wants to remain a ‘leader’ from cigarettes towards smoke-free them. in cigarettes. products, PMI intends to maintain its market position. Our leadership position in the cigarette market gives us greater ability to convert Our vision is that one day smoke-free adult smokers to smoke-free products products will replace cigarettes. The and generates the revenues to fund our sooner the world transitions away from rapid transformation. A R Its executives have explicitly said As PMI—and the world—transitions away cigarettes, the sooner we can stop making it will not give up market share of from cigarettes towards smoke-free them. cigarettes to its competitors. products, PMI intends to maintain its market position. Our leadership position in the cigarette market gives us greater ability to convert Our vision is that one day smoke-free adult smokers to smoke-free products products will replace cigarettes. The and generates the revenues to fund our sooner the world transitions away from rapid transformation. 2 A R PMI has acquired tobacco We are unlikely to be interested in any multiple international markets access to companies and launched acquisition that does not further our drive KT&G’s smoke free products for the first subsidiaries since 2016 when it towards a smoke-free future. While not time; accelerating the achievement of voiced ambitions to phase out an acquisition, our recently announced PMI’s vision of a smoke-free future while cigarettes global (ex- South Korea) collaboration enabling KT&G to benefit from PMI’s agreement with KT&G is a case in point. technical, scientific and international expertise in helping adult smokers switch Through that transaction we are able to better alternatives. This collaboration to bring PMI’s resources, knowledge will benefit adult smokers by providing and infrastructure as we launch greater choice and drive accelerated KT&G’s smoke-free products outside adoption of smoke-free products South Korea. Products sold under this worldwide. Further information can be agreement will give consumers across found here. A R PMI has launched new cigarette We have always been clear about our free products for adults who would brands, flavours and limited intention to maintain leadership in the otherwise continue smoking, PMI intends editions since 2016 combustible tobacco category until all to maintain its market position. adult smokers switch to smoke-free products. Our vision is that one day smoke-free products will replace cigarettes. The In addition, 92% of our research and sooner the world transitions away from development is focused on smoke-free cigarettes, the sooner we can stop making products, as is over 60% of our commercial them. expenditure .2 Our leadership position in the cigarette As PMI—and the world—transitions away market gives us greater ability to convert from cigarettes towards providing smoke- smokers to smoke-free products. 2 See our 2018 Sustainability report https://www.pmi.com/sustainability/sustainability-report A R Since PMI announced it wanted This is misleading. But it’s equally clear that millions of men to phase out cigarettes it has and women will continue to smoke, and fought legal action against PMI agrees that tobacco products should they should have the opportunity to tobacco control policies while be subject to strict rules and enforcement. switch to better alternatives. publicly claiming it wants to At times, we have objected forcefully phase out cigarettes, a position to measures that would do nothing to https://www.pmi.com/who-we-are/our- which critics have called dissuade people from starting to smoke or views/regulation hypocritical encourage cessation. 3 2) PHILIP MORRIS INTERNATIONAL’S CONTINUED YOUTH-FOCUSED ADVERTISING AND MARKETING OF CIGARETTES: A R PMI has introduced cigarettes A number of these brands—such as • PMI only places advertising in media in coloured packaging attractive Marlboro Tropical Mix and Marlboro channels, venues or events that are not to children and young people. Pacific Breeze—are not part of PMI’ directed to minors and whose audience is It has introduced flavours like product portfolio. reasonably estimated to be at least 75% Marlboro Tropical Mix, Marlboro adults. Pacific Breeze, Marlboro The others are not intended for children Double Burst, Marlboro Fusion, or young people. PMI only markets • Advertising on television, in radio Marlboro Mega Blast, Marlboro cigarettes to legal-aged smokers. broadcasts, or in cinemas only appears in Ice Blast, Marlboro Splash Mega the later evening hours. Purple, Marlboro Bright Beyond, Marlboro Vibe Beyond etc which • PMI does not use images that have appeal to children and young particular appeal to minors, including • PMI does not place advertising on people. youth-oriented celebrities or cartoons. the front or back cover of a printed publication for general circulation or • PMI does not use models who are or general circulation to the trade. who appear to be under the age of 25. A R In some countries PMI cigarettes We are committed to doing our part to and to work with them to guard against appear at point of sale next to prevent underage use of nicotine and sales to underage purchasers. We have chocolates and sweets which tobacco products. developed a set of tools for our affiliates appeal to children and young to use to work more closely with their people, which violates some PMI neither owns nor has any means of trade partners to guard against sales countries’ tobacco control laws control over the vast majority of the retail to underage purchasers, such as model points of sale around the world where clauses for contracts with trade partners, people buy our products.