Philip Morris to sell Marlboro HeatStick

MICHAEL FELBERBAUM
JUNE 27, 2014
AAP
PHILIP Morris International hopes to capitalise on the growing appetite for alternatives to traditional smokes, like e-cigarettes, with a new Marlboro-branded product that heats tobacco rather than burning it.
THE world’s second-biggest tobacco company has detailed its plans to release the Marlboro HeatStick in cities in Japan and Italy later in 2014, with further expansion plans in 2015.
The products represent another run at improving heating technologies that failed when originally introduced in the 1990s.
The short, cigarette-like sticks are heated to maximum of 350 degrees Celsius in a hollow pen-like device called iQOS (pronounced EYE-cohs) to create a tobacco-flavoured nicotine vapour. Unlike popular e-cigarettes that use liquid nicotine, the HeatStick contains real tobacco, a point the company believes will make them more attractive to cigarette smokers.
It’s one of several so-called “reduced-risk” products Philip Morris International plans to test as the industry diversifies beyond traditional cigarettes amid declining demand.
Products like the HeatStick “represent a potential paradigm shift for the industry, public health and adult smokers,” CEO Andr Calantzopoulos said during an investor day presentation on Thursday.
The company has spent about $US2 billion ($A2.16 billion) over more than a decade on development of the products and expects that iQOS would boost its profit by $US700 million when sales reach 30 billion units.
The Marlboro maker announced plans in January to invest up to 500 million euros ($A749.96 million) for two plants in Italy to make the products.
On Tuesday, the company said in addition to its own cigarette alternatives, it purchased UK-based e-cigarette maker Nicocigs Ltd. Financial terms were not disclosed.