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Thursday Jun 07 2018
By
REUTERS

Exclusive: Philip Morris plans to target Indian smokers with iQOS device - sources

By
REUTERS

NEW DELHI: Philip Morris International Inc (PM.N) is planning to launch its iQOS smoking device in India, four sources familiar with the matter told Reuters, as the tobacco giant seeks a foothold in a country with the world’s second-biggest smoker population.

Philip Morris says the sleek, penlike iQOS heats but does not burn tobacco, producing a nicotine-containing vapor rather than smoke and making it less harmful than conventional cigarettes. The company says it wants to one day stop selling cigarettes altogether.

India has stringent laws to deter tobacco use, which the government says kills more than 900,000 people every year. But the country still has 106 million adult smokers, second only to China according to the World Health Organization, making it a lucrative market for Philip Morris to target.

A government source said New Delhi would keep an “open mind” if Philip Morris approached it to discuss a device that helped people quit smoking, but added such devices, including e-cigarettes, could be banned if found to be harmful.

The health ministry did not respond to a request for comment. 

Philip Morris plans to start strategist an iQOS launch in India, which would include work on branding and pricing, as well as reaching out to media and regulators, sources aware of the plan said. The company’s top corporate affairs executive in India, R. Venkatesh, has been interviewing candidates for a senior executive who would focus on iQOS, the sources said.

The company wants “to put together a strategy to achieve its acceptability as a reduced risk product”, said one of the sources, adding that Philip Morris wanted to have a public relations strategy in place before moving ahead.

A Philip Morris spokesman said “we do not comment on our launch plans, but are committed to working hard to replace cigarettes with scientifically substantiated smoke-free products”. Venkatesh did not respond to a request for comment.

But the company appears to have already started building a public case for iQOS in India.

On “World No Tobacco Day” last week, Venkatesh wrote a column for India’s Economic Times newspaper, calling for “effective regulations” for alternative smoking devices.

“With alternatives to cigarettes available and countries already delivering on their smoke-free ambitions, the incentive is there for lawmakers to support Indian smokers - who deserve a better option,” Venkatesh said.

India's Tobacco Market 

Philip Morris has for years promoted its Marlboro cigarettes in India. Though its market share has quadrupled in recent years, Marlboro still accounts for only about 1.4 percent of India’s $10 billion cigarette market.

According to internal documents published by Reuters last year here:%2033738-the-philip-morris-files, the company sees India as a "high potential market" where it aimed at "winning the hearts and minds" of people between 18, the minimum legal age to buy tobacco products, and 24.

IQOS is currently used by nearly 5 million people in more than 30 countries, led by Japan which effectively bans regular e-cigarettes but allows “heat not burn” devices.

India could offer Philip Morris a huge opportunity due to its burgeoning middle class, said Shane MacGuill, head of tobacco research at Euromonitor International.Philip Morris has also applied to the U.S. Food and Drug Administration (FDA) for permission to market the device as being less harmful than cigarettes. In January, a panel of FDA advisers said iQOS exposes users to lower levels of harmful chemicals, but added the company had not shown that lowering exposure to those chemicals was reasonably likely to translate into a measurable reduction in disease or death.

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